Elements of financial statements The IASC Framework identifies assets, liabilities and equity as the financial statement elements

directly related to the measurement of financial position. The elements directly related to the measurement of performance are income and expenses. Financial statements portray the financial effects of transactions and other events by grouping them into broad classes according to their economic characteristics. These broad classes are termed the elements of financial statements [35]. The elements directly related to financial position (balance sheet) are:

Assets Liabilities Equity

The elements directly related to performance (income statement) are:

Income Expenses

The cash flow statement reflects both income statement elements and changes in balance sheet elements. Definitions of the elements relating to financial position Asset. An asset is a resource controlled by the enterprise as a result of past events and from which future economic benefits are expected to flow to the enterprise. Liability. A liability is a present obligation of the enterprise arising from past events, the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits. Equity. Equity is the residual interest in the assets of the enterprise after deducting all its liabilities. Definitions of the elements relating to performance Income. Income is increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants. Expense. Expenses are decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity participants. [F.70] One more opinion on the elements of financial statements. The Financial Accounting Standards Board (FASB) has defined the following elements of financial statements of business enterprises: 1) Assets; 2) liabilities; 3) equity; 4) revenues; 5) expenses; 6) gains; 7) losses; 8) investment by owners; 9) distribution to owners; 10) comprehensive income. According to the FASB, the elements of financial statements are the building blocks with which financial statements are constructedthe broad classes of items that financial statements comprise. In its "Elements of Financial Statements of Business Enterprises," the FASB defined the interrelated elements that are directly related to measuring performance and the financial position of a business enterprise as follows:

Assets include any items of monetary value owned by a company with current or probable future economic benefits. Comprehensive income is the change in equity (net assets) of an entity, from transactions and other events and circumstances from non-owner sources, during a particular period. It includes all changes in equity during a period except those resulting from investments by owners and distributions to owners. Distributions to owners are decreases in net assets of a particular enterprise resulting from transferring assets, rendering services, or incurring liabilities to owners. Distributions to owners decrease ownership interest or equity in an enterprise. Equity refers to the value of a company after deducting a company's liabilities from its assets. Expenses are outflows or payments of assets, or obligations to pay liabilities, during a period, from delivering or producing goods or rendering services as well as from carrying out other activities that constitute part of a business's ongoing or central operation. Gains are increases in equity (net assets) from peripheral or incidental transactions of an entity and from all other transactions and other events and circumstances affecting the entity during a period, except those that result from revenues or investments by owner. Investments by owners are increases in net assets of a particular enterprise resulting from transfers to it from other parties of something of value to obtain or increase ownership interest (or equity) in it. Liabilities are current or probable future debts arising from present obligations of a company to transfer assets or provide services to other entities in the future as a result of past transactions or events. Losses are decreases in equity (net assets) from peripheral or incidental transactions of an entity and from all other transactions and other events and circumstances affecting the entity during a period, except those that result from expenses or distributions to owners. Revenues are sales or other enhancements of assets of a company or settlement of its liabilities (or a combination of both) during a period from delivering or producing goods, rendering services, or other activities that constitute the entity's ongoing major or central operations.