Introduction:
Definition of elements:
Assets:
Present economic resources
o Is a right
o Produce economic benefits
Controlled by entity
o Economic resource use
o Benefits flow from the resource
Result of past events
Liabilities:
Present obligation of entity
o Is a right duty and responsibility of an entity and need to
avoid
Transfer economic resources
Result of past events
Income:
Increase A, Decrease L
Increase E
Other than relating to contributions from shareholders of equity
claims
Expenses:
Increase L, Decrease A
Decrease E
Other than relating to contributions from shareholders of equity
claims
Equity:
E=A-L
Conceptual Framework:
Underlying assumptions:
Going concern: implies that it is assumed that at all times that the
entity will exist in the foreseeable future.
Accrual basis: All transactions are recorded when they occur did not
when cash is received or paid.
Definition of elements:
Assets:
Present economic resources
o Is a right
o Produce economic benefits
Controlled by entity
o Economic resource use
o Benefits flow from the resource
Result of past events
Liabilities:
Present obligation of entity
o Is a right duty and responsibility of an entity and need to
avoid
Transfer economic resources
Result of past events
Income:
Increase A, Decrease L
Increase E
Other than relating to contributions from shareholders of equity
claims
Expenses:
Increase L, Decrease A
Decrease E
Other than relating to contributions from shareholders of equity
claims
Equity:
E=A-L
Conceptual Framework:
Underlying assumptions:
Going concern: implies that it is assumed that at all times that the
entity will exist in the foreseeable future.
Accrual basis: All transactions are recorded when they occur did not
when cash is received or paid.
