CUT-OFF Definition

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CUT-OFF is designating a point of termination. An auditor uses tests of cutoff to obtain evidence that transactions for each year are included in the financial statements of the appropriate year.

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AVERAGE FUNDS EMPLOYED see FUNDS EMPLOYED.

SPLIT ACCOUNTING, under IAS 39, provides that if certain conditions are met the 'embedded derivative' in a 'hybrid (combined) financial instrument' (i.e, a financial instrument which includes a non-derivative 'host contract' as well as an embedded derivative) must be accounted for separately from the 'host contract'.

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