Chapter 5

• the elements of financial statements are the building blocks from which financial statements are constructed
• financial position: asset, liability, equity
• financial performance: income and expense
• equity is the residual interest in the assets of the entity after deducting all of the liabilities
• asset: present economic resource, produce economic benefits, controlled by the entity as a result of past event
• gains do not arise in the course of the ordinary regular activities
• statement of comprehensive income is different from income statement
• expense: decrease in asset or increases in liabilities results in decrease in equity
• expense arise from ordinary regular activities
• losses resulting from disaster