Recognition
Definition
Recognition, in accounting context is the process of capturing for inclusion in the statement of financial position or the statement(s) of financial performance an item that meets the definition of one of the elements of financial statements (an asset, a liability, equity, income or expenses).
Recognition involves depicting the item in one of those statements, either alone or in Aggregation with other item, in words and by a monetary amount, and including that amount in one or more totals in that statement.
Conversely, Derecognition denotes the exclusion of an asset or liability from reporting when when the contractual rights to the cash flows from the financial asset expire, or the reporting entity transfers the financial asset
IFRS 9
(Initial) Recognition in the context of IFRS 9 denotes the first inclusion of an asset or liability in financial reporting. Reporting entities must recognise a financial asset or a financial liability in its statement of financial position when, and only when, the entity becomes party to the contractual provisions of the instrument (e.g. when originating or purchasing an asset).
