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CONCEPT OF AN ASSET
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- Resource controlled by the enterprise
- Past event
- Inflow of future economic benefits (probable)
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CONCEPT OF A LIABILITY
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- Obligation of the enterprise
- Past events
- Outflow of future economic benefits (probable)
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CONCEPT OF EQUITY
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- Residual interest
- Assets – Liabilities = Equity
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CONCEPT OF INCOME
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- Increase in economic benefits, inflows and enhancements of asset values, decreases in liabilities
- Corresponding recognition of increases in assets and decreases in liabilities
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CONCEPT OF EXPENSE
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- Decrease in economic benefits, outflows and decreasement of asset values and increases in liabilities
- Corresponding recognition of decreases in assets and increases in liabilities
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