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33. An essential
characteristic of income (revenue) and expenses is that
the related inflows and outflows of assets and liabilities
have already taken place. If those inflows or outflows
have taken place, the related revenue and expense are
recognised; otherwise they are not recognised. The
framework says that "expenses are recognised in the income
statement when a decrease in future economic benefits
related to a decrease in an asset or an increase of a
liability has arisen that can be measured reliably ... . [The]
framework does not allow the recognition of items in the
balance sheet which do not meet the definition of assets
or liabilities".
34. In measuring the assets,
liabilities, income, expenses, and cash flows reported in its
financial statements, an enterprise that reports only annually
is able to take into account information that becomes
available throughout the financial year. Its measurements are,
in effect, on a year-to-date basis.
35. An enterprise that reports
half-yearly uses information available by mid-year or shortly
thereafter in making the measurements in its financial
statements for the first six-month period and information
available by year-end or shortly thereafter for the 12-month
period. The 12-month measurements will reflect possible
changes in estimates of amounts reported for the first
six-month period. The amounts reported in the interim
financial report for the first six-month period are not
retrospectively adjusted. Paragraphs 16(d) and 26 require,
however, that the nature and amount of any significant changes
in estimates be disclosed.
36. An enterprise that reports
more frequently than half-yearly measures income and expenses
on a year-to-date basis for each interim period using
information available when each set of financial statements is
being prepared. Amounts of income and expenses reported in the
current interim period will reflect any changes in estimates
of amounts reported in prior interim periods of the financial
year. The amounts reported in prior interim periods are not
retrospectively adjusted. Paragraphs 16(d) and 26 require,
however, that the nature and amount of any significant changes
in estimates be disclosed.
Revenues received seasonally,
cyclically, or occasionally
37. Revenues that are received
seasonally, cyclically, or occasionally within a financial
year should not be anticipated or deferred as of an interim
date if anticipation or deferral would not be appropriate at
the end of the enterprise's financial year.
38. Examples include dividend
revenue, royalties, and government grants. Additionally, some
enterprises consistently earn more revenues in certain interim
periods of a financial year than in other interim periods, for
example, seasonal revenues of retailers. Such revenues are
recognised when they occur.
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