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HMRC internal manual

Bank Levy Manual

Definitions: recognition

Recognition is a widely used term that is unambiguous and clearly understood by accountants. It is defined in the IASB Framework (paragraph 82) thus:

Recognition is the process of incorporating in the balance sheet or income statement an item that meets the definition of an element and satisfies the criteria for recognition set out in paragraph 83. It involves the depiction of the item in words and by a monetary amount and the inclusion of that amount in the balance sheet or income statement totals. Items that satisfy the recognition criteria should be recognised in the balance sheet or income statement. The failure to recognise such items is not rectified by disclosure of the accounting policies used nor by notes or explanatory material.