CHAPTER 5: CONCEPTUAL FRAMEWORK (Elements of

Financial Statements)
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1. Asset economic resource and that the potential economic benefits no longer need to be expected to flow to the
entity
2. Asset present economic resource controlled by the entity as a result of past events
3. Constructive arise from normal business practice, custom and a desire to maintain good business relations or act in an
Obligation equitable manner
4. Equity residual interest in the assets of an entity after deducting all of the liabilities
5. Expense decreases in assets, or increases in liabilities that result in decrease in equity, other than those relating to
distribution to equity holders
6. Expense encompasses losses
7. Gains represent other items that meet the definition of income and do not arise in the course of ordinary regular
activities
8. Income increase in assets or decreases in liabilities that result in increase in equity, other than those relating to
contributions from equity holders
9. Income encompasses both revenue and gain
10. Legal Obligations obligations enforceable as a consequence of a binding contract or statutory requirement
11. Liability present obligation of an entity to transfer an economic resource as a result of past events
12. Liability obligation to transfer an economic resource and not the ultimate outflow of economic benefits
13. Obligation duty or responsibility that an entity has no practical ability to avoid
14. Regularity essence of revenue
15. Revenue arises in the course of the ordinary regular activities