Summary Statement of Financial Position

CHAPTER 2
STUDY NOTES

, Financial Position as Reflected in
the Statement of financial
Position.
The Duality Concept
→ Framework for the accountability of funds


Employment of funds = Generated funds
Debit (Dr) Credit (Cr)

→ Basic Accounting Equation

Assets = Equity + Liabilities
Debit (Dr) Credit (Cr)




Elements included in Statement of Financial Position

In conceptual framework for Financial Reporting (March 2018)
Definition and Recognition Criteria
A=E+L


ASSETS EQUITY LIABILITIES
Definition Direct Influences Definition
→ Present economic → Positive: Funds → Current Obligation
resource contributed by the → To transfer economic
→ Controlled by owner. resources
entity. → Negative: Funds → Resulting from past
→ As a result of past withdrawn by the owner. events
events Indirect Influences Recognition
Recognition → Profit/ loss of the entity → Relevance
→ Relevance activities of the entity → Faithful Representation
→ Faithful which increases/
Representation decrease the equity.