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(76)-ELEMENTS OF FINANCIAL STATEMENTS

Tuesday, January 12, 2010

Elements of Financial Statements

The elements of financial statements are listed. They are:
  • Assets
  • Liabilities
  • Ownership interest
  • Gains
  • Losses
  • Contributions from owners
  • Distribution to owners


Any item that does not fall within one of the definitions of elements should not be included in financial statements. The definitions are as follows.


Assets are rights or other access to future economic benefits controlled by an entity as a result of past transactions or events.


Liabilities are obligations of an entity to transfer economic benefits as a result of past transactions or events.


Ownership interest is the residual amount found by deducting all of the entity’s liabilities from all of the entity’s assets.


Gains are increases in ownership interest, other than those relating to contributions from owners.


Losses are decreases in ownership interest, other than those relating to distributions to owners.
Contributions from owners are increases in ownership interest resulting from investments made by owners in their capacity as owners.


Distributions to owners’ decreases in ownership interest resulting from transfers made to owners in their capacity as owners.

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