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Chapter 4: Elements of Financial Statement (Present economic resource…
Chapter 4:
Elements of Financial Statement
Present economic resource controlled
by the entity as a result of past event
Right
Obligation of Another Party
Correspond
Not Correspond
Established by contract or legislation
Goods or Services
Entity
Assets of that entity
Cannot have economic benefits
Entity's RIGHTS
Potential to produce
economic benefits
Entitling or enabling
Derives the value
Incurring expenditure and Acquiring assets
Control
Links (economic resource to an entity)
ECONOMIC RESOURCE
A present obligation of the entity to transfer an economic resource as a result of past events
Obligation
Transfer of an economic resource
Present obligation as aresult of past events
3) ACCOUNT & LIABILITY
Unit of account
Executory contracts
Substance of contractual rights and contractual obligations
Increases in assets, or decreases in liabilities, that result in increases in equity, other than those relating to contributions from holders of equity claims
The residual interest in the assets of the entity after deducting all its liabilities
Different classes
Equity claims
Decreases in assets, or increases in liabilities, that result in decreases in equity, other than those relating to distributions to holders of equity claims
1) ASSET
2) LIABILITY
4) EQUITY
5) INCOME & EXPENSES
INCOME
EXPENSES