文档介绍：4 The e Statement and e Recognition
Accounting School · Zhongnan University of Economics & Law
ntermediate Accounting
I
中级会计学
1. Concepts of e
Intermediate Accounting 4 The e Statement and e Recognition
Capital Maintenance Concept
Under this concept, corporate e for a period of time is the amount that may be paid to stockholders during that period and still enable the corporation to be as well off at the end of the period as it was at the beginning.
Assume a corporation assets of $50,000 at the beginning and $90,000 at the end of the year, and that no additional investments or withdrawals were made.
assets $90,000
Less: Additional investment 0
assets excluding investment $90,000
Less: assets (50,000)
Total e for the year $40,000
The corporation could pay out $40,000 to stockholders and still be as well off at year-end.
Example of Capital Maintenance
Intermediate Accounting 4 The e Statement and e Recognition
Transactional Approach
Under this concept, pany records assets at their historical cost, and it does not record changes in the asset and liabilities unless a transaction, event, or circumstance has occurred that provides reliable evidence of a change in value.
Intermediate Accounting 4 The e Statement and e Recognition
2. Elements of the e Statement
In FASB Statement of Concepts No. 6, the FASB defined the elements or "building blocks" of the e statement:
Revenues
Expenses
Gains
Losses
Intermediate Accounting 4 The e Statement and e Recognition
Elements of the e Statement — Revenues
Revenues are inflows of assets of pany or settlement of its liabilities during a period from delivering or producing goods, rendering services, or other activities that are pany’s ongoing major or central operations.
Revenue recognition is the process of formally recording and reporting an item in pany’s financial statements.
Intermediate Accounting 4 The e Statement and e Recognition
Elements of the e Statement — Expenses
Expenses are outflows of ass