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00:00To be authoritative, where are specific standards conflict with conceptual favour?
00:22When a particular item has a standard, it is only considered.
00:30You must have seen it.
00:31It is written in the standard of impairment.
00:33This is the definition of impairment, but it is not applied on these items.
00:36This is a particular standard, but it is not applied on those items.
00:40For the items which have their own standard, the rest of the standards are applied on them.
00:44Otherwise, we see it as the same standard.
00:47However, the value of inventory also falls.
00:50And the value of an arm asset also falls.
00:52When the value of an arm asset falls, where do we see it?
00:55When the value of an arm asset falls, we see it in impairment.
00:58But when the value of inventory falls, where do we see it?
01:00We see it in IS-2.
01:02When there is a specific standard for a particular item, it is followed.
01:06As it is given in this book as well.
01:09You get money in advance in the government grant.
01:14You get money in advance in the government grant.
01:17But if there are any conditions attached to it, you cannot take the income until those conditions are fulfilled.
01:24This is the standard of the government grant.
01:26But what is the liability?
01:29The liability is decreasing.
01:31Assets are increasing.
01:33In the government grant, money is coming.
01:36Where did the liability come from?
01:38This is an increasing asset.
01:40What is an increasing asset?
01:42Income.
01:43You are getting money in the government grant.
01:45Cash is coming.
01:46So you should write the asset.
01:48Why do you write the liability?
01:50The reason is that the standard has changed.
01:53What did the conceptual framework change?
01:55Increase in assets income.
01:57I told you about the conceptual framework.
02:00But what does the government grant say?
02:03If there are conditions attached to it.
02:05Cash is coming.
02:06There is an increase in assets.
02:07But you will not book the asset.
02:09You will book it as a deferred income liability.
02:13When there is a particular standard for an item, who will you follow?
02:18You will follow the standards.
02:20You will not follow the conceptual framework.
02:23This was the only objective.
02:24Because of this, we covered a small area of the conceptual framework.
02:29Let's move on.
02:31Objective number 7.
02:39Objective number 7.
03:09First, let's see the answer.
03:35Which of the following items should be recognized as an asset?
03:54In the statement of financial position of an entity, which asset will you write?
03:58You can never write the asset to the workforce.
04:00Why?
04:01Friend.
04:02Friend.
04:03Friend.
04:04Hey.
04:05Hey.
04:06What is your name?
04:07Mubashir.
04:11Mubashir.
04:12Shahid.
04:13Shahid.
04:14What is your father's name?
04:15Shahid.
04:16Shahid's son will answer this question.
04:18You have sent the workforce to Germany and trained them by investing 5-7 crores.
04:26You expect benefit from them in the future.
04:29So, the expenditure on this workforce, which has been sized by their minds,
04:34So, when you tell this statement to the workforce, we should not have booked the asset.
04:39Why?
04:41There is no control.
04:45To book an asset, three conditions should be met.
04:50Resource.
04:51Control.
04:52And future economic environment.
04:54You can see the workers.
04:55You can also see the people in front of you.
04:57But in the morning, you say that you don't come.
04:59You resign.
05:00What will you do?
05:01No control.
05:02Good.
05:03Next, it is written.
05:04A highly lucrative contract signed during the year, which is due to commence shortly after the year end.
05:13There is a contract.
05:16So, the contract is not a resource.
05:18We have some item as a resource.
05:21So, there is no resource.
05:23So, when the contract will be executed, there will be benefit.
05:26What is written further?
05:29A government grant relating to the purchase of an item of plant.
05:36A government grant relating to the purchase of an item of plant several years ago, which has a remaining life of four years.
05:44Tell me.
05:45The government grant that you get related to the asset, do you book it in the asset?
05:51Or do you book liability or make it less than the asset?
05:54There are two options.
05:58Government grant relating to the treatment of the asset.
06:00Either make it less than the cost of the asset.
06:03Or if you book liability, book less than the asset.
06:06If you book the asset, there is an ad in the asset.
06:09Either book liability or make it less than the asset.
06:13This is not right.
06:14A receivable from a customer, which has been sold to a finance company.
06:20The finance company has full recourse to the entity for any losses.
06:25Optionally, this is the answer.
06:27But it is not in our syllabus.
06:30Factoring of receivables.
06:32It is not in our syllabus.
06:37What does factoring of receivables mean?
06:39If you take money from me, I will sell it to you.
06:43Not to you.
06:44I will sell the money I take from you.
06:46If I take 100 rupees from you, you will recover it.
06:49I will recover it.
06:50In Pakistan, this is called goondaraj.
06:52There are proper companies in the outside world.
06:55Did you hear that?
06:57I will not say it when I say it.
07:01In Pakistan, if you want to recover, you have to hire goons.
07:05Hindus?
07:06You have to hire goons.
07:08I am going to hire John Green.
07:10I have taken money from someone.
07:14According to me, it is 51 lakhs, but 42 lakhs have been signed.
07:17I have a letter.
07:20Okay.
07:21He has signed it.
07:232-3 months ago.
07:24I have a margin.
07:26What?
07:27I have a margin.
07:28Cash is not available.
07:32There is no class.
07:34Okay, good.
07:35I will give you a margin of 25%.
07:37I will give you 10 lakhs.
07:3810 lakhs.
07:3910 lakhs.
07:4310%
07:4420%
07:4515%
07:4615%
07:47I will give you a margin.
07:49Okay.
07:50I will give you 2% and 25%.
07:53The upper limit is 25%.
07:55When will you offer it?
07:56After the contract.
07:57Okay.
07:58Keep quiet.
07:59A receivable from a customer which has been sold to a finance company.
08:04The finance company has full recourse to the entity for any losses.
08:07Full recourse.
08:08There is a concept in this.
08:10You will read it in the financial instrument.
08:12In CFAP 1.
08:13What is full recourse without recourse?
08:16Full recourse means that if your customer.
08:20You wanted to take 100 rupees.
08:22I sold it to him.
08:23He said okay.
08:24I will take it.
08:25Now when I sell it for 100 rupees.
08:27Maybe I will sell it for 95 rupees.
08:30How much should I sell it for 100 rupees?
08:3295 rupees.
08:3395 rupees.
08:34Then 5 rupees.
08:35He also has the benefit of recovery.
08:36But he told me this.
08:37If I don't get the money.
08:39Then you will give me full.
08:41If your customer doesn't give me money.
08:44Then I will take it from you.
08:45This is called full recourse.
08:47The recovery company is not ready to bear the loss.
08:51But it will recover and give its charges.
08:54And without recourse.
08:56Whose loss will it be?
08:58It will be of that company.
08:59I sell it for 100 rupees.
09:00I sell it for 90 rupees.
09:01I took 90 rupees from him.
09:03How much did he take from that customer?
09:05100 rupees.
09:06So if he recovers 100 rupees.
09:07How much will the company save?
09:0910 rupees.
09:10If he doesn't recover.
09:11It can be a loss of 100 rupees.
09:12But what happens with recourse?
09:14If that customer doesn't give.
09:16Then you can take full money from him.
09:18This is the concept here.
09:19That's why it says.
09:20The finance company has full recourse to the entity for any losses.
09:23So brother.
09:24If the next company does not shift profit loss.
09:27And with full recourse.
09:29Which means you are receivable.
09:31The control of the asset is transferred.
09:34When the risk and rewards go to the next party.
09:36Receivable is my asset.
09:38I want to transfer that company.
09:41But the risk and rewards have not been transferred.
09:43It is still with me.
09:45It means it is my asset.
09:46The company's asset is new.
09:48But when the risk and rewards are transferred.
09:50It becomes the party's asset.
09:52There is one more thing about the paper.
09:54When the objective comes in the paper.
09:56And there are 3-4 options.
09:57The strangest option will be the answer.
10:00More than 99% cases.
10:03If you don't understand things.
10:06The strangest option will be the answer.
10:10You put it in the paper.
10:11But you don't understand.
10:13Is it right?
10:14But it can be the strangest option.
10:17Let's move ahead.
10:19Is it clear to everyone?
10:21Objective number 7.
10:22Do one more reading.
10:39Is it clear?
10:51Objective number 8.
10:53Do one more reading.
10:55Is it clear?
11:25Objective number 9.
11:26Do one more reading.
11:27Is it clear?
11:28Objective number 10.
11:29Do one more reading.
11:30Is it clear?
11:31Objective number 11.
11:32Do one more reading.
11:33Is it clear?
11:34Objective number 12.
11:35Do one more reading.
11:36Is it clear?
11:37Objective number 13.
11:38Do one more reading.
11:39Is it clear?
11:40Objective number 14.
11:41Do one more reading.
11:42Is it clear?
11:43Objective number 15.
11:44Do one more reading.
11:45Is it clear?
11:46Objective number 16.
11:47Do one more reading.
11:48Is it clear?
11:49Objective number 17.
11:50Do one more reading.
11:51Is it clear?
11:52Objective number 18.
11:53Do one more reading.
11:54Is it clear?
11:55Objective number 19.
11:56Do one more reading.
11:57Is it clear?
11:58Objective number 20.
11:59Do one more reading.
12:00Is it clear?
12:01Objective number 21.
12:02Do one more reading.
12:03Is it clear?
12:04Objective number 22.
12:05Do one more reading.
12:06Is it clear?
12:07Objective number 23.
12:08Do one more reading.
12:09Is it clear?
12:10Objective number 24.
12:11Do one more reading.
12:12Is it clear?
12:13Objective number 25.
12:14Do one more reading.
12:15Is it clear?
12:16Objective number 26.
12:17Do one more reading.
12:18Is it clear?
12:19Objective number 27.
12:20Do one more reading.
12:21Is it clear?
12:22Objective number 28.
12:23Do one more reading.
12:24Is it clear?
12:25Objective number 29.
12:26Do one more reading.
12:27Is it clear?
12:28Objective number 30.
12:29Do one more reading.
12:30Is it clear?
12:31Objective number 31.
12:32Do one more reading.
12:33Is it clear?
12:34Objective number 32.
12:35Do one more reading.
12:36Is it clear?
12:37Objective number 33.
12:38Do one more reading.
12:39Is it clear?
12:40Objective number 34.
12:41Do one more reading.
12:42Is it clear?
12:43Objective number 35.
12:44Do one more reading.
12:45Is it clear?
12:46Objective number 36.
12:47Do one more reading.
12:48Is it clear?
12:49Objective number 37.
12:50Do one more reading.
12:51Is it clear?
12:53Objective number 38.
12:54Do one more reading.
12:55Is it clear?
12:56Objective number 39.
12:57Do one more reading.
12:58Is it clear?
12:59Objective number 40.
13:00Do one more reading.
13:01Is it clear?
13:02Objective number 41.
13:03Do one more reading.
13:04Is it clear?
13:05Objective number 41.
13:06Do one more reading.
13:07Is it clear?
13:08Objective number 42.
13:09Do you find that you've satisfied your rank?
13:10Do you find I'm the only person satisfied?
13:11Do I say you've done a fantastic job?
13:12What things have you given negative marks in the other course?
13:13Applause for our mareasons.
13:14Congratulations from your class.
13:15On behalf of Miss Am Córah definitely should get congratulations.
13:16Thank you all.
13:47So, I am going to show you how to do it, how to do it, how to do it, how to do it, how
14:17to do it, how to do it, how to do it, how to do it.
14:47So, I am going to show you how to do it, how to do it, how to do it, how to do it.
15:17So, I am going to show you how to do it, how to do it, how to do it, how to do it, how
15:24to do it, how to do it, how to do it, how to do it.
15:54We know that. Tell us, is this a criticism of historical cost or not?
16:00Tell us.
16:01Is it?
16:02No.
16:03No? Why not?
16:07I am asking, why not?
16:13In which paper did you give your smiley?
16:24Yes, tell us.
16:28In historical cost accounting,
16:31they show our gearing as overstated.
16:35You have already seen the answer, that the answer is beta.
16:39Now you say that this is not the answer, then why is it not for others?
16:44This means that this is not a criticism.
16:46This is the truth.
16:47What are you saying?
16:48This is the truth.
16:49This is not a criticism.
16:50What is the truth hidden in this?
16:52They overstate gearing.
16:54How many capable people are there?
16:58What?
16:59Rising prices.
17:01It is expensive to go there.
17:05The bread and butter is not spoiled.
17:07The flies are spoiling.
17:08Your debate is going on.
17:13They overstate.
17:14Yes, tell us.
17:16They say that gearing is more visible in the statehood of financial position.
17:20Why?
17:21How is it more visible?
17:24What do people do?
17:28We are defining historical cost accounting.
17:32And we are saying that this is not its criticism.
17:35Its criticism is that you are saying that transactions are not verifiable.
17:40If transactions are not verifiable, how will the financials be written?
17:44You saw above, some of the items are at current values.
17:48And some at out of date values.
17:51Now that statement was wrong.
17:53So you will say that this is not a criticism.
17:56The statement was wrong about this historical cost.
17:59Now this statement can also be wrong.
18:02This statement can also be right.
18:04Maybe it is right in some other concept.
18:07But it is not right in historical cost.
18:09Then tell me how will you correct it?
18:12First tell me the meaning of this.
18:14Can there be a problem in gearing due to historical cost?
18:18Assume it.
18:20How many things are there in gearing?
18:28That is gearing ratio.
18:29That is why I asked.
18:31What all is there in gearing?
18:36What is there in gearing?
18:37It is the level of debt.
18:38Yes.
18:39To compare it.
18:40What is the level of debt?
18:42Where do we use it?
18:44We apply capital gearing ratio.
18:49We apply capital gearing ratio.
19:20Yes, tell me.
19:23In historical cost accounting,
19:25the debt is written on the same value.
19:27Equity is also written on the same value.
19:31Is the price rising or decreasing?
19:33Neither the amount of debt nor the amount of equity will change.
19:38Are you understanding?
19:39So in historical cost accounting,
19:41Gearing cannot be increased.
19:43Because what happens in gearing?
19:44One debt and one equity.
19:46Both will come on their values.
19:47What is the use of method of apportionment?
19:51If the level of debt is high,
19:52then the gearing will be high.
19:53If the level of debt is low,
19:54then the gearing will be low.
19:56So this criticism
19:57is not made on historical cost.
19:59Because if we write debt to equity ratio,
20:01debt is also on its value.
20:03And equity is also on its value.
20:05In historical cost,
20:06the value will not change.
20:08If the value does not change,
20:09then the concept of overstating and understating will not apply.
20:11That is why this historical cost
20:13does not become a criticism.
20:15Is it clear?
20:16What are the other objectives?
20:17All are moving.
20:18Look inside.
20:20What are the other objectives?
20:21Objective number 9.
20:40In rare terms,
20:41we take inflation.
20:42But in money terms,
20:43we do not take inflation.
20:45So,
20:46if you do not take inflation,
20:47then it is historical cost accounting.
20:50We have not studied fair value accounting.
20:53And anyway,
20:54in fair value accounting,
20:55fair value is taken.
20:56Now two are left.
21:09Purchasing power
21:11is related to our entity.
21:13Current cost accounting.
21:14In current cost accounting,
21:15we say
21:16what is the current value of the atom in the market.
21:19And when we talk about the atom,
21:21there is specific inflation.
21:23When we talk about the atom,
21:25there is specific inflation.
21:27There is no general inflation.
21:29But,
21:30in financial capital maintenance,
21:31in real terms,
21:32we were looking at general inflation.
21:34And general inflation,
21:35general inflation,
21:36overall,
21:37affects all the purchasers.
21:39There is a concept in economics.
21:41Constant purchasing power.
21:43If there is inflation,
21:44what will be the purchasing power?
21:46It will be less.
21:47The purchasing power
21:48will be less overall,
21:50than general inflation.
21:52But, in specific inflation,
21:54the purchasing power of that entity will be less.
21:58So, in real terms,
21:59general inflation is seen.
22:01In specific inflation,
22:02the current cost is very much relevant
22:04to a particular entity.
22:07What is the overall purchasing power?
22:09It is in general inflation.
22:10So, what is the answer?
22:12Physical capital maintenance
22:14is also referred to as current cost.
22:17Physical capital maintenance
22:19is very much specific to an entity.
22:21That particular atom,
22:22in which we were trading,
22:24in recent times,
22:25at which price,
22:26they will be able to procure it.
22:28So, the price we have,
22:30is shown in current cost.
22:32So, which element is
22:34relevant to physical capital maintenance?
22:36Let's move ahead.
22:37In which of the following,
22:39no adjustment for inflation is considered?
22:42Wow!
22:43Which was it?
22:44Money terms.
22:45Money terms.
22:46Financial capital maintenance, money terms.
22:48In which of the following,
22:49inflation adjustment is made
22:51on general rate of inflation?
22:53Real terms.
22:54Real terms.
22:55Wow!
22:56In which of the following,
22:57inflation adjustment is made
22:58on specific rate of inflation?
23:00Physical capital maintenance.
23:02Financial capital maintenance
23:03Financial capital maintenance
23:04Financial capital maintenance
23:05is likely to be most relevant to
23:07Investors.
23:09How did you find out?
23:11Because of this.
23:12Because of this.
23:13Yes, I think you are going to like it.
23:16By the way, we said that
23:18investors are also interested in inflation.
23:20Yes.
23:21And
23:22I
23:23First, listen to me.
23:25We said that inflation,
23:27which affects us,
23:29that
23:30the management point of view
23:32is physical capital maintenance.
23:34And
23:35the general inflation that
23:37we have,
23:39what investors see is
23:41financial capital maintenance.
23:42Right?
23:43Now, tell me the answer.
23:44Financial capital maintenance
23:46is likely to be most relevant to
23:48Investors.
23:50Hide it.
23:52You want to tell?
23:54Tell.
23:55Tell the reason for the answer.
23:56What is it?
23:57Sir, you said
23:58that financial capital maintenance
24:00is from the investors
24:02and physical capital maintenance
24:03is from the management.
24:04But you said that
24:05both are affected by inflation.
24:06Yes, sir.
24:07So, why is the answer
24:08only from the investors?
24:10Because we are talking about
24:11financial capital maintenance.
24:12We are talking about
24:13financial capital maintenance.
24:15Investors are also affected by inflation.
24:17Management is also affected.
24:19It is written on the top.
24:21Financial capital maintenance.
24:23Management has nothing to do
24:25with financial capital maintenance.
24:27What is the answer to that?
24:28Physical capital maintenance.
24:30That is why the answer is from the investors.
24:35Physical capital maintenance
24:37is likely to be most relevant to
24:39Management and
24:41Management and
24:43Inflation.
24:51Let's move on.
24:53It is written on the top.
24:54Now, practice it.
24:56Numerically.
24:58The concept that we studied.
25:00Physical.
25:01The concept that we studied in the past.
25:03Objective number 16.
25:27Yes.
25:43I am telling you this today.
25:45I was sitting behind.
25:46This is a message for both the children.
25:48Sometimes,
25:49because of the weather,
25:51or because of the situation,
25:52or because of your actions,
25:54pimples start appearing on the face.
25:56Get it treated by a proper doctor.
25:58I have seen a lot of marriages being rejected.
26:00That the girl has pimples on her face.
26:02Or the boy has pimples on his face.
26:06We used to have fun earlier.
26:08I am telling you literally.
26:10All the people used to have fun with him.
26:12Standing in front of the mirror.
26:14Without the mirror.
26:16This makes your face look bad.
26:18People also pay for your work.
26:20They also pay for your personality.
26:22You must be presentable.
26:24If you are standing on your face.
26:26Who will stand in front of you?
26:30If you take care of the rest.
26:32Take care of your face too.
26:34Whenever you see a pimple like this.
26:36Because this is not natural.
26:38This is due to some dysfunction.
26:40Meet the doctor.
26:44He will tell you.
26:46What did you do with your life?
26:48And in the beginning.
26:50I have seen people.
26:52They have fun.
26:54That today is the day to have fun.
27:00You may not like this.
27:02But I am telling you the future.
27:06You are a younger brother.
27:08I am telling you.
27:10All these things matter.
27:12You will not feel it now.
27:14No one can see the rest of your body.
27:16You can only see the face.
27:18And the face is also cursed.
27:28All the good people sit in front of you.
27:30Anyway, all the good people sit in front of you.
27:32Come on.
27:34Come on.
27:46Come on.
27:48Come on.
27:50Come on.
27:52Come on.
27:54Come on.
27:56Come on.
27:58Come on.
28:00Come on.
28:02Come on.
28:04Come on.
28:06Come on.
28:08Come on.
28:10Come on.
28:12Come on.
28:14Come on.
28:16Come on.
28:18Come on.
28:20Come on.
28:22Come on.
28:24Come on.
28:26Come on.
28:28Come on.
28:30Come on.
28:32Come on.
28:34Come on.
28:36Come on.
28:38Come on.
28:40Come on.
28:42Come on.
28:44Come on.
28:46Come on.
28:48Come on.
28:50Come on.
28:52Come on.
28:54Come on.
28:56Come on.
28:58Come on.
29:00Come on.
29:02Come on.
29:04Come on.
29:06Come on.
29:08Come on.
29:10Come on.
29:42We have closed the opening capital and we want to do financial capital maintenance in real terms.
29:52First, we will see how much money is needed for the business next year.
29:56Financial capital maintenance is real, so we will have to adjust 5% inflation.
30:02What is the 5% of this?
30:0450,000