Elements of balance sheets

Balance sheet

  • Report firm’s financial position at a point in time
  • Consist of 3 elements
    • Assets (4): Resource controlled as results of past transactions that is expected to provide future economic benefits
    • Liability(5): Obligation as a result of past events that are expected to require outflows of economic resources
    • Equity(6): The owner’s residual interest in the asset after deducting the liabilities
  • Recognized when future benefits is probable and items value can be measured reliably