Lekcja3

Equity is the residual interest in the assets of the entity after deducting all its liabilities.

The two principal elements of equity are:

There is sufficient evidence of existence

In assessing whether an item meets the definition of an asset, liability or equity, attention needs to be given to its underlying substance and economic reality and not merely its legal form.

In assessing whether an item meets the definition of an asset, liability or equity, attention needs to be given to its underlying substance and economic reality and not merely its legal form.

Neither of the income statement components has any direct recognition relationship with cash or cash equivalents.

This distinction is explained further later in this chapter.

The table illustrates, for a number of events, the impact on assets, liabilities, income and expenses: