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THE CONCEPTUAL FRAMEWORK
Elements of the financial statements
Equity
• Definition:
• The residual interest in the assets of the entity after
deducting all its liabilities.
Income
• Definition:
• Income includes gains and revenue.
• Revenue arises from ordinary activities of an entity.
• Gains may or may not arise from ordinary activities of any entity.
• Recognition:
• When an increase in future economic benefits related to an
increase in an asset or decrease of a liability has arisen that
can be measured reliably
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