IAS 38Chapter 2Lesson 2
The vocabulary of IAS 38
Step 1 of 6Learning objectives
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Research, development, cost, fair value, useful life, residual value, depreciable amount, amortisation, carrying amount, impairment loss… IAS 38 relies on precise vocabulary. This lesson explains each term with a concrete example, groups them into families and shows how they link together, from the cost of a piece of software to its amount in the statement of financial position.
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Learning objectives
- Distinguish research from development based on the nature of the work.
- Explain in your own words the measurement terms: cost, fair value, entity-specific value, monetary assets.
- Link cost, residual value, depreciable amount, amortisation, carrying amount and impairment loss in a numerical example.
- Spot frequent confusions between neighbouring terms (amortisation and impairment loss, cost and depreciable amount).