What is the true meaning of an Asset based on IFRS? - YouTube

Good morning co-Accountants thank you very much for continously watching our videos

according to the 2018 conceptual

framework

asset is defined as a present economic

resource controlled by the entity

as a result of past events in this

definition there are three

keywords

first is present economic resource

controlled by the entity

result of past events

economic resource is a right that has

the potential to produce economic

benefits

so if you have a right over a certain

asset

and if that right could lead to potential

economic benefits

and that met in terms of the definition

of an asset

so meaning for example you have

inventories and these inventories you

have the right to sell these inventories

and that right after you have sold those

inventories you will recognize for

a certain level of income or sales and

that is considered the economic benefits

another critical aspect of the

definition according to the 2018

conceptual framework is that an asset

has to be controlled by the entity

so

owned by the company so based on the

definition of the conceptual framework

it has to be controlled meaning it is not only owned by the

company there should be an element of

control because there are

assets own by company but they don't

have the control

and there are assets controlled by

the company but they don't own these

assets

but according to the conceptual

framework it has to be controlled so

anything controlled by the company

and they earn economic they recognize

economic benefits

therefore they should be considered as

assets

control is actually linked to a right

when we say

right the company has to have

a right the right to sell to pledge

or to dispose that property

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so if you have these rights like for example you have the right to sell the assets to sell the property or to pledge as a result of an obligation

therefore you can establish that there

is a control over that asset

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theoretically your concept control

is similar on how we assess control in

line with IFRS 15

and IFRS 10 wherein there should be

there should be an element of power over

that asset

and we can actually demonstrate or

establish

that benefits can be recognized in

terms of that power

the last important concept when it comes

to assets is that

assets should be recognized as a result

of past events

and and these past events mean that

there is an

action in the past that occurs which

triggers the recognition of an asset

like for example you vote on inventories

okay you recognize inventories and that

is the past event

you have recognized an asset as a result

of

of buying those inventories

hopefully i have explained in a proper way the

concept assets

in line with the conceptual framework

this concept is really critical because there

will be a lot of accounting concepts

where in control has to be assessed so

as early as now i think we need to be

knowledgeable in terms of the basic

on when to recognize an asset

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