Studied by 0 people
Looks like no one added any tags here yet for you.
SFAC No.6 "Elements of Financial Statements"
issued by fasb in 1985. sfac no. 6 defines fundamental elements of financial statements under US GAAP.
two categories: describe an entity's financial position at point and time + those that reflect changes in financial position over time
Elements representing Financial position [balance sheet elements]
provide a snapshot of entity's financial status at specific point in time.
assets
probable future economic benefits controlled by entity due to past transactions or events
liabilities
future sacrifices of economic benefits due to present obligations arising from past transactions or events
equity (net assets)
residual interest in entitys assets after deducting liabilities (owners claim on net assets)
Changes in financial position (flow elements)
Reflect transactions and events which alter an entity's financial position over a period of time
Performance related elements (income statement elements)
Measure financial performance over a period of time
Revenues
Inflows of economic benefits from delivering goods, services, or other core operational activities
Expenses
Outflows of economic benefits incurred in generating revenues
Gains
Increases in equity from peripheral or incidental transactions (e.g asset sales, lawsuits won).
Losses
Decreases in equity from peripheral or incidental transactions (e.g. asset impairment, lawsuit settlement)
Ownership-Related Elements (Statement of Changes in Equity Elements)
These elements track changes in equity unrelated to revenues and expenses
Investments by Owners
Increases in equity from contributions by owners (e.g. issuing stock)
Distributions to Owners
Decreases in equity from transferring resources to owners 9/like paying dividends)
Comprehensive Income
Total change in equity from non-owner sources, including net income and other comprehensive income (OCI). Items being foreign currency adjustments and unrealized gains/losses on investments.
