07-14-2006, 06:55 PM
<blockquote id="quote"><font size="1" face="Verdana, Tahoma, Arial" id="quote">quote<hr height="1" noshade id="quote"><i>Originally posted by amdcai</i>
I know the distinction between them very well, the distinction is not clear according to the IASB framework, could you explain to me the phrase "may, or may not" . If i don't know the distinction between them i could say that Gains may arise in the course of the ordinary activities of an entity.
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Make it more clear if u know.
The phrase "may not" is very clear from my previous example that is gain on sale of fixed assets.
For the word "may" take an example of bank or mutual fund. Banks invest their funds in securities of other companies inorder to have an effective use of funds available with bank and inorder to create subordinated loans in b/w banks. Although investment in securities is not their core activity, gain on sale of investments may be treated as their normal course of business because its ancillary to their main objective and their main objective is to utilize the funds. So, they may sell securities whenever the market is favourable. Thats why gain on sale of investments is shown on the face of income statement according to BSD 36 issued by State Bank of Pakistan. The status of it is still 'gain' and not 'revenue'.
I know the distinction between them very well, the distinction is not clear according to the IASB framework, could you explain to me the phrase "may, or may not" . If i don't know the distinction between them i could say that Gains may arise in the course of the ordinary activities of an entity.
<hr height="1" noshade id="quote"></font id="quote"></blockquote id="quote">
Make it more clear if u know.
The phrase "may not" is very clear from my previous example that is gain on sale of fixed assets.
For the word "may" take an example of bank or mutual fund. Banks invest their funds in securities of other companies inorder to have an effective use of funds available with bank and inorder to create subordinated loans in b/w banks. Although investment in securities is not their core activity, gain on sale of investments may be treated as their normal course of business because its ancillary to their main objective and their main objective is to utilize the funds. So, they may sell securities whenever the market is favourable. Thats why gain on sale of investments is shown on the face of income statement according to BSD 36 issued by State Bank of Pakistan. The status of it is still 'gain' and not 'revenue'.
