CIPA Kazakhstan key terms

Accounting approach that records revenue when earned and expenses when incurred, regardless of when cash moves. It produces a more faithful picture of performance than cash receipts alone.

Rule that expenses are recognised in the same period as the revenue they helped generate. It supports accrual accounting and prevents profit distortion from timing differences.

An obligation for goods or services already received but not yet invoiced or paid, such as unpaid wages at period end. It is recorded by debit expense and credit liability.

A payment made before the benefit is consumed, such as advance rent or insurance. It is an asset until the coverage period passes, then it becomes an expense.

Liabilities of uncertain timing or amount, such as warranties or legal claims, recognised when a present obligation exists and a reliable estimate is possible.

A possible obligation depending on a future uncertain event, or a present obligation that cannot be measured reliably. It is disclosed rather than recognised unless outflow becomes probable and measurable.

The amount by which an asset's carrying amount exceeds its recoverable amount. Recognising it reduces the asset on the statement of financial position and charges profit or loss.

The value at which an asset or liability appears in the financial statements after deducting accumulated depreciation, amortisation and impairment. It is the book value used in ratio analysis.

Systematic allocation of a tangible asset's depreciable cost over its useful life. The method chosen, straight-line or reducing balance, must reflect the pattern of benefits consumed.

Statements presenting a parent and its subsidiaries as a single economic entity. Intra-group balances and transactions are eliminated, and non-controlling interests are shown separately.

An intangible asset arising on acquisition, equal to consideration plus non-controlling interest less the fair value of identifiable net assets. It is not amortised but tested annually for impairment.

The portion of a subsidiary's net assets and profit attributable to shareholders other than the parent. It is presented within equity in consolidated statements.

Sales revenue less variable costs. It measures how much each unit or sale contributes toward fixed costs and profit, and it underpins break-even and target-profit calculations.

The activity level at which total revenue equals total cost and profit is zero. It is computed as fixed costs divided by contribution per unit.

The excess of budgeted or actual sales over break-even sales, expressed in units, revenue or percentage. It indicates how far sales can fall before losses arise.

Decision technique using only future cash flows that differ between alternatives. Sunk costs and allocated fixed overheads are excluded because they do not change with the decision.

The value of the best alternative forgone when a resource is used for one purpose. It is relevant to decisions even though it never appears in accounting records.

Setting predetermined costs for materials, labour and overhead, then comparing actual results to reveal variances. Variances are analysed by price and quantity causes for control.

A budget restated for the actual activity level achieved. Comparing it with actual costs isolates spending variances from volume effects in performance reports.

The process of decomposing differences between budgeted and actual results into price and quantity components. It identifies responsibility and prompts corrective management action.

The risk that the auditor expresses an inappropriate opinion on materially misstated financial statements. It comprises inherent, control and detection risk components.

The threshold above which omissions or misstatements could influence users' economic decisions. It guides the extent of testing and evaluation of identified misstatements.

Information used by the auditor to reach conclusions, obtained through inspection, observation, enquiry, confirmation, recalculation, reperformance and analytical procedures. It must be sufficient and appropriate.

The processes designed by those charged with governance to provide reasonable assurance about reliable reporting, effective operations and compliance. Auditors assess control risk and may test controls.

Assigning incompatible tasks, such as authorising, recording and safeguarding assets, to different people. It reduces the chance that errors or fraud go undetected.

An attitude of questioning alertness to conditions suggesting misstatement or fraud, including critically assessing evidence rather than accepting it at face value.

Freedom from relationships or interests that could compromise objectivity, in fact and appearance. Safeguards include rotation, fee restrictions and prohibitions on certain non-audit services.

An indirect tax charged on supplies of goods and services, with registered businesses recovering input tax against output tax collected. The net amount is remitted to the tax authority.

Tax deducted at source by a payer on certain payments, such as royalties or interest to non-residents, and remitted to the tax authority. It secures collection before funds leave the country.

A fixed place of business or dependent agent through which a non-resident conducts business in a country, creating local tax obligations under domestic law and treaties.

A bilateral agreement allocating taxing rights between states and providing relief such as credits or exemptions. It reduces the burden on income taxed in both jurisdictions.

The amount on which tax is calculated, after permitted deductions, exemptions and adjustments. Correctly determining it is central to computing corporate income tax liability.

A legal relationship where one party acts on behalf of another with authority to affect the principal's legal position. The agent owes duties of obedience, care and loyalty.

A duty of loyalty and good faith owed by someone entrusted with another's interests, requiring them to avoid conflicts and not profit personally from the position.

Creation of a binding agreement through offer, acceptance, consideration and intention to create legal relations. Capacity and legality are also required.

The ethical duty not to disclose information obtained through professional relationships without authority, unless disclosure is required by law or permitted by the code.

The blended required return on a firm's debt and equity, weighted by their market values. It is used as the discount rate for projects of average risk.

The sum of a project's expected cash flows discounted at the required rate, less initial investment. A positive result suggests the project adds value.

The discount rate at which a project's net present value equals zero. Comparing it with the cost of capital indicates acceptability, though it can mislead for non-conventional cash flows.

The return shareholders require for holding a firm's shares, often estimated with the capital asset pricing model or dividend growth model. It is a component of the weighted average cost of capital.

The principal accounting record containing all accounts and their balances, from which financial statements are prepared. Sub-ledgers for receivables and payables feed into it.

Integrated software covering accounting, procurement, inventory and human resources on a shared database. It improves data consistency but concentrates risk in access controls.

The recorded sequence of transactions and system events enabling reconstruction of activity from source to report. It supports investigation and provides evidence for auditors.

The ethical obligation to attain and maintain the knowledge and skill needed for assignments, acting only within one's capability and seeking expert help where necessary.