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COMMISSION REGULATION (EC) No 108/2006 of 11 January 2006
amending Regulation (EC) No 1725/2003 adopting certain
international accounting standards in accordance with
Regulation (EC) No 1606/2002 of the European Parliament
and of the Council.
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APPENDIX A
Defined terms
This appendix is an integral part of the IFRS.
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credit risk |
The risk that one party
to a financial instrument will cause a financial
loss for the other party by failing to discharge an
obligation.
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currency risk |
The risk that the fair
value or future cash flows of a financial instrument
will fluctuate because of changes in foreign
exchange rates.
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interest rate risk |
The risk that the fair
value or future cash flows of a financial instrument
will fluctuate because of changes in market interest
rates.
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liquidity risk |
The risk that an entity
will encounter difficulty in meeting obligations
associated with financial liabilities.
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loans payable |
Loans payable are financial liabilities, other than
short-term trade payables on normal credit terms.
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market risk |
The risk that the fair
value or future cash flows of a financial instrument
will fluctuate because of changes in market prices.
Market risk comprises three types of risk: currency
risk, interest rate risk and other price risk.
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other price risk |
The risk that the fair
value or future cash flows of a financial instrument
will fluctuate because of changes in market prices (other
than those arising from interest rate risk or
currency risk), whether those changes are caused by
factors specific to the individual financial
instrument or its issuer, or factors affecting all
similar financial instruments traded in the market. |
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past due |
A financial asset is
past due when a counterparty has failed to make a
payment when contractually due.
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The following terms are defined
in paragraph 11 of IAS 32 or paragraph 9 of IAS 39 and
are used in the IFRS with the meaning specified in IAS
32 and IAS 39.
— amortised cost of a financial
asset or financial liability
— available-for-sale financial
assets
— derecognition
— derivative
— effective interest method
— equity instrument
— fair value
— financial asset
— financial instrument
— financial liability
— financial asset or financial
liability at fair value through profit or loss
— financial guarantee contract
— financial asset or financial
liability held for trading
— forecast transaction
— hedging instrument
— held-to-maturity investments
— loans and receivables
— regular way purchase or sale
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