IFRS Financial Accounting Standards
15 chapters
1. IFRS Conceptual Framework & Core Principles
[Verse 1]
When we build our framework strong and true
IFRS gives us principles to pursue
Financial statements tell a story clear
With relevance and faithful representation here
Going concern assumes we'll stay in play
Unless there's evidence we'll fade away
[Chorus]
R-F-C-U, that's the way we see it through
Relevant and Faithful, Comparable too
Understandable for users who depend
On information that we comprehend
Accrual basis shows us what is real
Not just the cash that we can feel
[Verse 2]
Recognition comes when criteria align
Probable benefits in the bottom line
Measurement follows with our chosen base
Historical cost or fair value in its place
Elements defined as assets, liabilities
Equity and performance realities
[Chorus]
R-F-C-U, that's the way we see it through
Relevant and Faithful, Comparable too
Understandable for users who depend
On information that we comprehend
Accrual basis shows us what is real
Not just the cash that we can feel
[Bridge]
Materiality guides our judgment call
If it matters to decisions, show it all
Timeliness and verifiability
Enhance the useful quality we see
When cash and accrual tell different tales
Accrual accounting always prevails
[Verse 3]
Primary characteristics lead the way
Enhancing features support what we say
Neutrality keeps our reporting fair
Free from bias everywhere we share
The framework stands as our foundation
For consistent global application
[Final Chorus]
R-F-C-U, that's the way we see it through
Relevant and Faithful, Comparable too
Understandable for users who depend
On information that we comprehend
Conceptual framework shows the light
Making financial reporting right
[Outro]
IFRS principles guide our way
Building trust in what we say
Framework strong from start to end
That's how professional standards blend
2. Revenue Recognition - IFRS 15 Five-Step Model
[Verse 1]
When a customer comes knocking with a deal to make
First you identify the contract that's at stake
Written or oral, enforceable and clear
Rights and payment terms must all appear
Commercial substance with collection probable
Step one complete, now we're getting notable
[Chorus]
I-D-A-L-R, five steps to get it right
Identify, Determine, Allocate with sight
Locate the price and Recognize with care
IFRS fifteen keeps revenue fair
I-D-A-L-R, remember every night
Revenue recognition done just right
[Verse 2]
Step two demands we dig a little deeper now
Performance obligations, let me show you how
Distinct goods or services the customer can use
Separately identifiable, they get to choose
Bundle or separate, make the call today
Each obligation lights the revenue way
[Chorus]
I-D-A-L-R, five steps to get it right
Identify, Determine, Allocate with sight
Locate the price and Recognize with care
IFRS fifteen keeps revenue fair
I-D-A-L-R, remember every night
Revenue recognition done just right
[Verse 3]
Transaction price in step three takes the center stage
Variable consideration on the payment page
Constraints and estimates, significant reversal test
Time value adjustments put your skills to the test
Non-cash considerations at their fair value
Step three's foundation keeps us sailing true
[Bridge]
Relative standalone selling price
Allocate to each obligation nice
Residual approach when prices aren't clear
Observable evidence keeps us sincere
[Verse 4]
Step four allocation spreads the wealth around
Standalone selling prices must be clearly found
Relative proportions make the math precise
Each obligation gets its proper slice
Variable consideration follows the same rule
Allocation methods are the accountant's tool
[Chorus]
I-D-A-L-R, five steps to get it right
Identify, Determine, Allocate with sight
Locate the price and Recognize with care
IFRS fifteen keeps revenue fair
I-D-A-L-R, remember every night
Revenue recognition done just right
[Verse 5]
Step five's the moment when we recognize at last
Over time or point in time, control must pass
Customer controls the asset or the benefit received
Three criteria help determine what we've achieved
Progress measurement keeps the timing true
Revenue recognition, we made it through
[Outro]
From contract to completion, five steps guide our way
IFRS fifteen principles will never lead astray
I-D-A-L-R, the model tried and true
Revenue recognition, now we're through
3. Complex Revenue Scenarios Under IFRS 15
[Verse 1]
When the price keeps changing in your deal
Variable consideration makes it real
Estimate your best guess from the start
Constraint the revenue, play it smart
Only when it's highly probable to stay
Recognition comes another day
[Chorus]
IFRS fifteen makes it clear and bright
Variable, Modify, Principal's right
Bill and hold when control has passed
License the IP to make it last
Complex scenarios, step by step
Revenue recognition you can't forget
[Verse 2]
Contract modifications change the game
New goods or services aren't the same
If distinct and priced at standalone rate
Separate contract you must create
But if not distinct or not at price
Modify existing, roll the dice
[Chorus]
IFRS fifteen makes it clear and bright
Variable, Modify, Principal's right
Bill and hold when control has passed
License the IP to make it last
Complex scenarios, step by step
Revenue recognition you can't forget
[Verse 3]
Are you principal or just an agent here
The question that accountants always fear
Control the good before you pass it on
Principal treatment, your revenue's strong
But if you're just arranging for another
Agent fees are all you can recover
[Bridge]
Bill and hold seems simple but beware
Customer must want it, you must care
Storage space identified and real
Reason for arrangement sealed the deal
Control transfers though you hold the goods
Revenue timing's understood
[Verse 4]
Licensing intellectual property rights
Functional or symbolic, different sights
If functional, recognize at point in time
Symbolic needs a pattern, paradigm
Over time as customer receives
The benefit your license achieves
[Chorus]
IFRS fifteen makes it clear and bright
Variable, Modify, Principal's right
Bill and hold when control has passed
License the IP to make it last
Complex scenarios, step by step
Revenue recognition you can't forget
[Outro]
From estimates to modifications too
Principal agent, what will you do
Bill and hold and licensing deals
IFRS fifteen shows what's real
4. Inventory Accounting - IAS 2
[Verse 1]
When goods arrive at your warehouse door
IAS 2 tells us what to explore
Purchase price plus the costs to bring
Transportation, duties, handling fees we sing
Recognition happens when control transfers over
Legal title shifts from seller to the buyer
[Chorus]
FIFO flows, first in first out
Weighted average spreads the doubt
Net realizable value, write it down below
Cost of goods sold, watch your profits grow
Measure inventory, lower of the two
Cost or NRV, IAS 2
[Verse 2]
Standard costing helps when prices fluctuate
Allocate the fixed costs, don't procrastinate
Variable costs follow production levels high and low
Fixed costs spread across the normal flow
Exclude the selling costs and storage too
Only include what brings the goods to you
[Chorus]
FIFO flows, first in first out
Weighted average spreads the doubt
Net realizable value, write it down below
Cost of goods sold, watch your profits grow
Measure inventory, lower of the two
Cost or NRV, IAS 2
[Bridge]
When selling price falls below the cost
Write down inventory, accept the loss
Reversal allowed when prices climb back up
But never above original cost setup
Formula's simple, selling price less costs to complete
Less selling expenses makes NRV complete
[Verse 3]
Opening stock plus purchases made
Less closing stock, COGS is displayed
Perpetual tracking every single day
Periodic counting at month-end way
Shrinkage and damage, write off what's gone
Financial statements must carry on
[Chorus]
FIFO flows, first in first out
Weighted average spreads the doubt
Net realizable value, write it down below
Cost of goods sold, watch your profits grow
Measure inventory, lower of the two
Cost or NRV, IAS 2
[Outro]
From raw materials to finished goods
IAS 2 does what accounting should
Lower of cost or net realizable
Makes inventory values verifiable
5. Property, Plant & Equipment - IAS 16
[Verse 1]
When you acquire a tangible asset for your company's use
More than one year of service, here's the recognition clues
Probable future benefits must flow into your hands
And you can measure cost reliably, that's where IAS sixteen stands
Land and buildings, equipment too, infrastructure in your sight
Recognize when control transfers and the price is set just right
[Chorus]
Cost or revaluation, pick your measurement way
Componentize the parts that have different lives each day
Depreciate systematically over useful years
Straight line, units, diminishing, choose the method that appears
Most faithful to consumption, IAS sixteen is clear
Property, plant, equipment rules we hold so dear
[Verse 2]
Initial measurement starts with purchase price you pay
Add the costs to bring it to location where it'll stay
Installation, testing, professional fees belong
Subtract trade discounts, this is how you get cost strong
Subsequent costs are capitalized when they enhance
Otherwise expense them, don't give them a second glance
[Chorus]
Cost or revaluation, pick your measurement way
Componentize the parts that have different lives each day
Depreciate systematically over useful years
Straight line, units, diminishing, choose the method that appears
Most faithful to consumption, IAS sixteen is clear
Property, plant, equipment rules we hold so dear
[Bridge]
Break it down to components when they're significant in cost
Engine, frame, and tires, track each part that can be lost
Revaluation model means fair value at each date
With increases going to equity, decreases calculate
If reserves exist use those first, then hit the income statement
Derecognize when disposed or no future benefit
[Verse 3]
Review useful life and residual each reporting year
Methods too might need changing as the estimates become clear
When you sell or scrap the asset, remove it from your books
Gain or loss goes to profit, that's how the standard looks
No more depreciation once it's classified held for sale
IAS sixteen guides you through each detailed trail
[Outro]
From recognition to disposal, every step along the way
IAS sixteen shows you how to properly display
Your property, plant, equipment in the books you keep
These accounting principles run strong and deep
6. Intangible Assets - IAS 38
[Verse 1]
When an asset has no physical form
But brings future benefits to your door
Three criteria must align in place
Recognition gets its rightful space
Identifiable and controlled by you
Future economic benefits flow through
Cost can be measured reliably too
IAS thirty-eight will see you through
[Chorus]
I-D-C that's the key
Identifiable, controlled, and measurably
R-and-D tell the story straight
Research costs we never capitalize, that's fate
Development only when criteria's met
Amortize finite, indefinite forget
[Verse 2]
Research phase seeking knowledge new
Expensed immediately, that's what we do
No future benefits can be shown
So research costs are never grown
But development's a different game
When technical feasibility you can claim
Intention and ability to complete and use
Commercial viability you cannot lose
[Chorus]
I-D-C that's the key
Identifiable, controlled, and measurably
R-and-D tell the story straight
Research costs we never capitalize, that's fate
Development only when criteria's met
Amortize finite, indefinite forget
[Bridge]
Six criteria for development's gate
Technical feasibility, don't be late
Intent to complete and use or sell
Resources to finish, do it well
Demonstrate the benefits will flow
Expenditure measured, let it show
All six together, then capitalize
Otherwise expense it, that's the prize
[Verse 3]
Finite life assets amortize each year
Systematic allocation, crystal clear
Residual value, useful life in mind
Straight line or usage, method you'll find
But indefinite life assets stand apart
No amortization, that's their art
Annual impairment testing required instead
Keep their value current, move ahead
[Chorus]
I-D-C that's the key
Identifiable, controlled, and measurably
R-and-D tell the story straight
Research costs we never capitalize, that's fate
Development only when criteria's met
Amortize finite, indefinite forget
[Outro]
IAS thirty-eight shows the way
Intangible assets, clear as day
From recognition through to end
These rules will always be your friend
7. Lease Accounting - IFRS 16
[Verse 1]
When you sign that lease agreement, IFRS sixteen comes alive
Right-of-use asset on your books, lease liability by your side
Day one recognition's crucial, capture what you have to pay
Present value of the payments, discount rate shows you the way
[Chorus]
ROU asset, lease liability
Discount rate, what's the key?
Short-term out, low-value free
IFRS sixteen, follow me
Modify the lease today
Remeasure what you have to pay
[Verse 2]
Incremental borrowing rate when lessor's rate is not known
Secured lending at similar terms, make that discount rate your own
Lease payments include the fixed, variable tied to index too
Options reasonably certain, penalties coming due
[Chorus]
ROU asset, lease liability
Discount rate, what's the key?
Short-term out, low-value free
IFRS sixteen, follow me
Modify the lease today
Remeasure what you have to pay
[Verse 3]
Right-of-use asset starts with liability, prepaid rent and costs
Initial direct expenses added, nothing here gets lost
Depreciate it straight-line method, or another systematic way
Interest on the lease liability, unwinding every day
[Bridge]
Twelve months or less you can elect out
Short-term leases, take that route
Five thousand dollars, low-value choice
Straight to expense, rejoice your voice
But if you modify the contract terms
New assessment, the standard confirms
[Verse 4]
Lease modifications change the scope, or consideration too
Separate lease or modify? Let the standard guide you through
If it's separate, new lease treatment, fresh assessment from day one
If not, remeasure liability, adjustment's not yet done
[Chorus]
ROU asset, lease liability
Discount rate, what's the key?
Short-term out, low-value free
IFRS sixteen, follow me
Modify the lease today
Remeasure what you have to pay
[Outro]
From operating to finance, the old days are gone
IFRS sixteen's here to stay, keep the standard strong
Balance sheet transparency, that's the goal we seek
Right-of-use assets and liabilities, every single week
8. Asset Impairment Testing - IAS 36
[Verse 1]
When assets lose their shine and glow
Time to test what we should know
External signs the market shows
Internal clues as cash flow slows
Technology becomes outdated
Performance gets deteriorated
Physical damage we can see
Or legal changes affecting me
[Chorus]
Test and measure, compare the cost
Find recoverable amount when value's lost
Higher of fair value less the cost to sell
Or value in use that serves us well
Cash generating units we define
When assets work together in a line
Impairment hits when carrying's too high
Time to write it down, don't let it lie
[Verse 2]
Cash generating units stand alone
Generate cash flows on their own
Independent from other streams
The smallest group that fits our schemes
Goodwill gets allocated here
To units that will make it clear
Where benefits are realized
From synergies that we prized
[Chorus]
Test and measure, compare the cost
Find recoverable amount when value's lost
Higher of fair value less the cost to sell
Or value in use that serves us well
Cash generating units we define
When assets work together in a line
Impairment hits when carrying's too high
Time to write it down, don't let it lie
[Bridge]
Goodwill tested once a year
Or when indicators appear
Two step process we must take
First the unit for goodwill's sake
If carrying exceeds recoverable
Then goodwill impairment's probable
Write down goodwill first in line
Then other assets in decline
[Verse 3]
Reversal rules we must respect
For assets we can reconnect
When indicators disappear
And value rises crystal clear
But goodwill never gets reversed
That impairment stays unrehearsed
All other assets can come back
If circumstances change their track
[Chorus]
Test and measure, compare the cost
Find recoverable amount when value's lost
Higher of fair value less the cost to sell
Or value in use that serves us well
Cash generating units we define
When assets work together in a line
Impairment hits when carrying's too high
Time to write it down, don't let it lie
[Outro]
IAS thirty-six our guide
Keep asset values dignified
When impairment comes to call
We'll be ready through it all
9. Financial Instruments Classification - IFRS 9
[Verse 1]
When financial assets come your way
IFRS nine shows the classification play
Three categories you need to know
Let me break it down so knowledge can flow
Business model test comes first in line
How you manage assets by design
Hold to collect or trade for gain
The model you choose will set the frame
[Chorus]
AC-FVOCI-FVTPL
Three buckets where your assets dwell
Amortized cost when you hold tight
Fair value changes in your sight
Business model, cash flow test
Two criteria for success
AC-FVOCI-FVTPL
Classification done extremely well
[Verse 2]
Contractual cash flows take the stage
Principal and interest on the page
SPPI test must pass the line
Solely payments by design
If both tests align just right
Amortized cost comes into sight
Hold to collect with cash flows plain
AC treatment you will gain
[Chorus]
AC-FVOCI-FVTPL
Three buckets where your assets dwell
Amortized cost when you hold tight
Fair value changes in your sight
Business model, cash flow test
Two criteria for success
AC-FVOCI-FVTPL
Classification done extremely well
[Verse 3]
Hold to collect and sell combined
FVOCI classification you will find
SPPI still must pass the test
Other comprehensive income blessed
Recycling gains when assets sold
Back to profit loss unfold
Fair value through OCI way
Equity section where changes stay
[Bridge]
When SPPI fails or trading calls
FVTPL breaks down the walls
Fair value through the profit line
Every change hits bottom line
No recycling, straight impact
Income statement stays intact
[Chorus]
AC-FVOCI-FVTPL
Three buckets where your assets dwell
Amortized cost when you hold tight
Fair value changes in your sight
Business model, cash flow test
Two criteria for success
AC-FVOCI-FVTPL
Classification done extremely well
[Outro]
Business model sets the tone
Cash flow tests stand alone
Three categories clear and bright
IFRS nine classification right
10. Expected Credit Loss Model - IFRS 9
[Verse 1]
Gone are the days of waiting for default
Incurred loss model is old news
IFRS nine brought a brand new approach
Expected credit loss is what we use
Look ahead not behind at what might come
Forward-looking is the key
Twelve months or lifetime, that's the sum
Of losses we expect to see
[Chorus]
Stage one, stage two, stage three we go
Twelve months, lifetime, watch the credit flow
Expected loss before it hits the door
Forward-looking is the core
Stage one, stage two, stage three we know
Impairment growing as the stages grow
ECL model, that's the way we score
Credit losses evermore
[Verse 2]
Stage one starts with recognition day
Credit risk is normal still
Twelve-month losses on display
Expected defaults, what's the bill?
But when significant increase appears
Credit risk has jumped up high
Stage two brings lifetime fears
All expected losses multiply
[Chorus]
Stage one, stage two, stage three we go
Twelve months, lifetime, watch the credit flow
Expected loss before it hits the door
Forward-looking is the core
Stage one, stage two, stage three we know
Impairment growing as the stages grow
ECL model, that's the way we score
Credit losses evermore
[Bridge]
Stage three means credit impaired
Objective evidence is there
Lifetime losses fully shared
Interest on the net to bear
Probability times exposure times loss given default
Multiply these three amounts
That's the formula without fault
Every credit loss it counts
[Verse 3]
Practical expedients help us through
Provision matrix is the way
Days past due give us the clue
Group assets by their risk array
External ratings, internal grades
Economic factors weigh them in
Reasonable supportable aids
The model where our loss begins
[Chorus]
Stage one, stage two, stage three we go
Twelve months, lifetime, watch the credit flow
Expected loss before it hits the door
Forward-looking is the core
Stage one, stage two, stage three we know
Impairment growing as the stages grow
ECL model, that's the way we score
Credit losses evermore
[Outro]
Forward-looking all the way
Expected credit loss today
IFRS nine is here to stay
ECL shows us the way
11. Hedge Accounting Under IFRS 9
[Verse 1]
When market risks threaten your bottom line
IFRS Nine shows the way to align
Your hedging strategy with accounting rules
Three relationships are your primary tools
Fair value hedges when assets fluctuate
Cash flow hedges for future cash you anticipate
Net investment when foreign subs are at stake
Choose your weapon for the risk you'll break
[Chorus]
Fair Cash Net, remember the set
Effectiveness testing, don't you forget
Eighty to one twenty five, the range to survive
Document your strategy to keep hedge alive
Fair Cash Net, the trio you bet
Qualify, measure, then don't regret
Mark to market or defer the gain
Hedge accounting eases the pain
[Verse 2]
Fair value hedges tackle existing exposure
Interest rate swaps bring rate composure
When your fixed rate bond meets floating rate derivative
Mark both to market, let gains be comparative
The hedge item and the hedging tool
Move together by the effectiveness rule
P and L impact gets neutralized
When your hedging relationship's optimized
[Chorus]
Fair Cash Net, remember the set
Effectiveness testing, don't you forget
Eighty to one twenty five, the range to survive
Document your strategy to keep hedge alive
Fair Cash Net, the trio you bet
Qualify, measure, then don't regret
Mark to market or defer the gain
Hedge accounting eases the pain
[Verse 3]
Cash flow hedges smooth future volatility
Forecast transactions need probability
Send derivative gains to OCI first
Until the hedged transaction is dispersed
When the forecast sale finally comes to pass
Move those deferred gains from equity class
Reclassify to match the underlying
Perfect timing, no more underlying
[Bridge]
Prospective testing looks ahead
Retrospective confirms what's been said
If effectiveness falls outside the band
Discontinue hedging, take your stand
Document at inception, that's the key
Risk management strategy for all to see
[Chorus]
Fair Cash Net, remember the set
Effectiveness testing, don't you forget
Eighty to one twenty five, the range to survive
Document your strategy to keep hedge alive
Fair Cash Net, the trio you bet
Qualify, measure, then don't regret
Mark to market or defer the gain
Hedge accounting eases the pain
[Outro]
Net investment in foreign operations
Currency hedges across all nations
Translate gains through OCI flow
IFRS Nine helps your knowledge grow
12. Fair Value Measurement - IFRS 13
[Verse 1]
When assets need their value shown
Fair measurement stands alone
IFRS thirteen shows the way
Market price is what we pay
Exit price on measurement date
Principal market sets the rate
Orderly transaction made
Not forced or liquidation trade
[Chorus]
Level One, Two, Three - hierarchy's key
Quoted prices, inputs, what we see
Market approach, cost and income too
Valuation techniques to guide you through
Highest best use for the asset class
Fair value measurement built to last
[Verse 2]
Level one is crystal clear
Quoted prices active here
Identical assets trading free
Observable for all to see
Level two adjusts the view
Inputs similar and true
Quoted prices for alike
Or other data we can strike
[Chorus]
Level One, Two, Three - hierarchy's key
Quoted prices, inputs, what we see
Market approach, cost and income too
Valuation techniques to guide you through
Highest best use for the asset class
Fair value measurement built to last
[Verse 3]
Level three unobservable
Management estimates the call
Discount rates and growth projected
Cash flows internally reflected
Three approaches lead the dance
Market gives us best chance
Cost replacement reproduction
Income streams and their reduction
[Bridge]
Non-financial assets sing
Highest best use is the thing
Physically possible and legal
Financially feasible sequel
Credit risk and liquidity
Factor in the entity
Own credit risk for liabilities
Fair value capabilities
[Chorus]
Level One, Two, Three - hierarchy's key
Quoted prices, inputs, what we see
Market approach, cost and income too
Valuation techniques to guide you through
Highest best use for the asset class
Fair value measurement built to last
[Outro]
Exit price perspective clear
Market participants appear
Orderly transaction view
IFRS thirteen guides you through
13. Complex Revenue Scenarios Under IFRS 15
[Verse 1]
When the contract holds uncertainty, variable consideration waits
Estimate the most likely amount or expected value calculates
Constraint the revenue recognized until highly probable it stays
Transaction price adjustments flow through future revenue days
[Chorus]
IFRS fifteen complexity unfolds
Variable, modify, agent roles
Bill-and-hold, licensing controls
Remember MAD-PBL when revenue rolls
Most likely, Agent, Distinct control
Performance obligations make you whole
[Verse 2]
Contract modifications change the game, analyze what's in your hand
Distinct goods at standalone price create contracts newly planned
If existing performance bundles tight, adjust the current strand
Allocation spreads across the rights that still remain unmanned
[Chorus]
IFRS fifteen complexity unfolds
Variable, modify, agent roles
Bill-and-hold, licensing controls
Remember MAD-PBL when revenue rolls
Most likely, Agent, Distinct control
Performance obligations make you whole
[Bridge]
Principal arranges goods directly, bears the inventory risk
Agent facilitates the transaction, earns commission brisk
Customer controls the promised asset, timing becomes the disk
Licensing grants access or usage rights, functional versus symbolic
[Verse 3]
Bill-and-hold postpones delivery but revenue might still flow
Customer requests the delayed arrangement, substantive reasons show
Segregated goods identified and ready for the throw
Legal title transfers early though physical goods won't go
[Outro]
Revenue recognition mastery through scenarios complex and deep
MAD-PBL methodology helps the standards that you keep
Variable constraints and modifications, principal relationships steep
IFRS fifteen guides the revenue that accounting souls will reap
14. Inventory Accounting - IAS 2
[Verse 1]
When assets roll through warehouse doors
Recognition starts the counting wars
Physical substance you can hold and weigh
Ready for sale another day
Probable benefits must flow your way
Control the item, own the play
[Chorus]
Inventory dancing, FIFO prancing
First goods in are first to leave
Weighted average keeps advancing
Smooth the costs that you receive
Lower cost or NRV
Write it down when values flee
Inventory dancing, cost romancing
IAS two will never deceive
[Verse 2]
Purchase price plus bringing costs
Conversion adds what labor tossed
Storage fees don't make the grade
Abnormal waste gets quickly flayed
Production overhead joins the mix
Systematic allocation tricks
[Chorus]
Inventory dancing, FIFO prancing
First goods in are first to leave
Weighted average keeps advancing
Smooth the costs that you receive
Lower cost or NRV
Write it down when values flee
Inventory dancing, cost romancing
IAS two will never deceive
[Bridge]
Net realizable value calls
Selling price minus costs that fall
Completion work and selling fees
Subtract them all with greatest ease
When carrying exceeds the net
Impairment loss you won't forget
[Verse 3]
Cost of sales equation sings
Opening stock plus purchases brings
Less the closing stock remains
Equal cost of sales explains
Weighted average smooths the ride
FIFO lets the old ones slide
[Chorus]
Inventory dancing, FIFO prancing
First goods in are first to leave
Weighted average keeps advancing
Smooth the costs that you receive
Lower cost or NRV
Write it down when values flee
Inventory dancing, cost romancing
IAS two will never deceive
[Outro]
Raw materials, work in progress too
Finished goods complete the crew
Inventory standard number two
Guides the counting that you do
15. IFRS Conceptual Framework & Core Principles
[Verse 1]
Financial statements tell a tale, but first we need a frame
IFRS conceptual foundation sets the rules of this reporting game
Relevance and faithful representation, twin pillars standing strong
Without these qualitative traits, our numbers lead us wrong
[Chorus]
CUVEC makes it relevant - Confirmatory value, Predictive power clear
Understandable, Verifiable, Enhanced with Comparable year to year
Complete and Neutral, Free from error, faithful representation's here
IFRS framework guides us through the accounting atmosphere
[Verse 2]
Recognition happens when we meet the definition test
Probable future benefits flow, measurement can be assessed
Elements arise when criteria satisfied beyond reasonable doubt
Assets, liabilities, equity - what accounting's all about
[Chorus]
CUVEC makes it relevant - Confirmatory value, Predictive power clear
Understandable, Verifiable, Enhanced with Comparable year to year
Complete and Neutral, Free from error, faithful representation's here
IFRS framework guides us through the accounting atmosphere
[Bridge]
Going concern assumes we'll operate another year
Unless liquidation's imminent or management shows fear
Accrual captures economic substance when events occur
Not when cash exchanges hands - that timing can defer
[Verse 3]
Performance obligation satisfied, revenue recognition flows
Matching principle connects expenses to the income that it shows
Materiality filters noise, let users see what matters most
Substance over form reveals the economic ghost
[Outro]
From conceptual framework springs every standard we apply
IFRS principles ensure our financial truth won't lie
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