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TMI BlogElements of Financial StatementsX X X X Extracts X X X X X X X X Extracts X X X X ..... ontrolled by the entity as a result of past events. Legal ownership of a physical objects may give rise to several rights, including: The right to use the object The right to sell rights over the object; The right to pledge rights over the object; and Other rights Potential to produce economic benefits An asset could produce economic benefits for an entity by way of re ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... exist three criteria must all be satisfied The entity has an obligation The obligation is to transfer economic resources; and The obligation is a present obligation that exist as a result of past events. Obligation Obligations are Contractual Legal Customary practices, published polices, public statements made. Duty or responsibility which cannot be avoid. ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... As a consequence, the entity will or may have to transfer an economic resources that it would not otherwise have had to transfer. Equity Equity is the owner s interest in the company determined by deducting liabilities from the net assets of the company, Equity is residual interest where the entity has no obligation to pay and it is the amount left with the entity therefore Equity is ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... i.e., 2022, expenditure related to such income should be recorded in the same year i.e., 2018. Notes :- Only items that meet the definition of an asset, a liability or equity are recognised in the balance sheet. similarly, only items that meet the definition of income or expenses in the statement of profit or loss. However, not all items that meet the definition of one of those elements ..... X X X X Extracts X X X X X X X X Extracts X X X X
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