DEFINITION OF TERMS

• Aggregation is the adding together of assets, liabilities, equity, income, or expenses that have shared characteristics and are included in the same classification
• Asset is a present economic resource controlled by the entity as a result of past events
• Carrying amount is the amount at which an asset, a liability, or equity is recognized in the statement of financial position
• Classification is the sorting of assets, liabilities, equity, income, or expenses on the basis of shared characteristics for presentation and disclosure purposes
• Combined financial statements are financial statements of a reporting entity that comprises two or more entities that are not all linked by a parent-subsidiary relationship
• Consolidated financial statements are financial statements of a reporting entity that comprises both the parent and its subsidiaries
• Control of an economic resource is the present ability to direct the use of the economic resource and obtain the economic benefits that may flow from it
• Derecognition is the removal of all or part of a recognized asset or liability from an entity’s statement of financial position
• Economic resource is a right that has the potential to produce economic benefits
• Enhancing qualitative characteristic is a qualitative characteristic that makes useful information more useful. The enhancing qualitative characteristics are comparability, verifiability, timeliness, and understandability
• Equity is the residual interest in the assets of the entity after deducting all its liabilities
• Equity claim is a claim on the residual interest in the assets of the entity after deducting all its liabilities
• Executory contract is a contract, or a portion of a contract, that is equally unperformed—neither party has fulfilled any of its obligations, or both parties have partially fulfilled their obligations to an equal extent
• Existence uncertainty is uncertainty about whether an asset or liability exists
• Expenses are decreases in assets, or increases in liabilities, that result in decreases in equity, other than those relating to distributions to holders of equity claims
• Fundamental qualitative characteristic is a qualitative characteristic that financial information must possess to be useful to the primary users of general purpose financial reports. The fundamental qualitative characteristics are relevance and faithful representation
• General purpose financial report is a report that provides financial information about the reporting entity’s economic resources, claims against the entity, and changes in those economic resources and claims that is useful to primary users in making decisions relating to providing resources to the entity
• General purpose financial statements are a particular form of general purpose financial reports that provide information about the reporting entity’s assets, liabilities, equity, income, and expenses
• Income is increases in assets, or decreases in liabilities, that result in increases in equity, other than those relating to contributions from holders of equity claims
• Liability is a present obligation of the entity to transfer an economic resource as a result of past events
• Material information is information whose omission or misstatement could influence decisions that the primary users of general purpose financial reports make on the basis of those reports, which provide financial information about a specific reporting entity
• Measure is the result of applying a measurement basis to an asset or liability and related income and expenses
• Measurement basis is an identified feature—for example, historical cost, fair value, or fulfillment value—of an item being measured
• Measurement uncertainty is uncertainty that arises when monetary amounts in financial reports cannot be observed directly and must instead be estimated
• Offsetting is grouping an asset and liability that are recognized and measured as separate units of account into a single net amount in the statement of financial position
• Outcome uncertainty is uncertainty about the amount or timing of any inflow or outflow of economic benefits that will result from an asset or liability
• Potential to produce economic benefits is within an economic resource, a feature that already exists and that, in at least one circumstance, would produce for the entity economic benefits beyond those available to all other parties
• Primary users (of general purpose financial reports) are existing and potential investors, lenders, and other creditors
• Prudence is the exercise of caution when making judgments under conditions of uncertainty. The exercise of prudence means that assets and income are not overstated and liabilities and expenses are not understated
• Recognition is the process of capturing for inclusion in the statement of financial position or the statement(s) of financial performance an item that meets the definition of one of the elements of financial statements—an asset, a liability, equity, income, or expenses
• Reporting entity is an entity that is required, or chooses, to prepare general purpose financial statements
• Unconsolidated financial statements are financial statements of a reporting entity that is the parent alone
• Unit of account is the right or the group of rights, the obligation or the group of obligations, or the group of rights and obligations, to which recognition criteria and measurement concepts are applied
• Useful financial information is financial information that is useful to primary users of general purpose financial reports in making decisions relating to providing resources to the reporting entity. To be useful, financial information must be relevant and faithfully represent what it purports to represent
• Users (of general purpose financial reports) - See primary users (of general purpose financial reports)
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