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Asset

A present economic resource controlled by the entity as a result of past events, comprising a right with the potential to produce economic benefits and under the entity's control.

Liability

A present obligation of the entity to transfer an economic resource due to past events,

Equity

The residual interest in the entity's assets after deducting all liabilities.

Income

Increases in assets or decreases in liabilities leading to increases in equity, excluding contributions from equity holders.

Expenses

Decreases in assets or increases in liabilities resulting in decreases in equity, excluding distributions to equity holders.

Relevant financial information

Information capable of influencing users' decisions, even if some users may choose not to use it or are already aware of it from other sources.

Faithful representation

Financial information must faithfully represent relevant phenomena, being complete, neutral, and free from error.

Recognition criteria for assets and liabilities

only if recognition of that asset or liability and of any resulting income, expenses or changes in equity provides users of financial statements with information that is useful

Recognition of income

Occurs simultaneously with the initial recognition of an asset or an increase in its carrying amount, or the derecognition of a liability or a decrease in its carrying amount.

Recognition of expenses

Occurs simultaneously with the initial recognition of a liability or an increase in its carrying amount, or the derecognition of an asset or a decrease in its carrying amount.

Accrual basis of accounting

The transactions are recognised and recorded on the day they occur and not when cash is received or paid

Cash basis of accounting

Income is not recognised in the financial records until cash is received and expense is not recognised until they have been paid in cash