What is Elements of financial statements?
In short
The Financial Accounting Standards Board's conceptual framework defines the elements of financial statements: assets, liabilities, equity, revenues, expenses, gains, losses, investments by owners, distributions to owners and comprehensive income.
Key takeaways
- An asset is a present right of an entity to an economic benefit.
- A liability is a present obligation of an entity to transfer or otherwise provide economic benefits to others.
- Gains and losses arise from peripheral or incidental activities; revenues and expenses from central operations.
Where it's tested
FAR: Conceptual Framework & Financial Statement Presentation — study notes, a five-minute revision sheet and practice questions.
Practise: 3 questions
Question 1 of 3 · 0 answered
Which element of financial statements is defined as the residual interest in the assets of an entity that remains after deducting its liabilities?