GLOSSARY of Accounting Terms -R


Realisable value

The amount of cash or cash equivalents that could currently be obtained by selling an asset in an orderly disposal.


The process of incorporating in the balance sheet or income statement an item that meets the definition of an element and satisfies the following criteria for recognition:

  1. it is probable that any future economic benefit associated with the item will flow to or from the entity; and
  2. the item has a cost or value that can be measured with reliability.


Information has the quality of relevance when it influences the economic decisions of users by helping them evaluate past, present or future events or confirming, or correcting, their past evaluations.


Information has the quality of reliability when it is free from material error and bias and can be depended upon by users to represent faithfully that which it either purports to represent or could reasonably be expected to represent.


The gross inflow of economic benefits during the period arising in the course of the ordinary activities of an entity when those inflows result in increases in equity, other than increases relating to contributions from equity participants.

Sale and leaseback transaction

The sale of an asset and the leasing back of the same asset. The lease payment and the sale price are usually interdependent because they are negotiated as a package.


The availability of cash over the longer term to meet financial commitments as they fall due.


An entity, including an unincorporated entity such as a partnership, that is controlled by another entity (known as the parent).

Substance over form

The principle that transactions and other events are accounted for and presented in accordance with their substance and economic reality and not merely their legal form.