Professional Documents
Culture Documents
and
Shareholder
s Equity
LIABILITIES
Maria Nicole Real
Liability
is defined as present obligation of an
entity arising from past events, the
settlement of which is expected to
result in an outflow from the entity of
resources embodying economic
benefits.
The essential
characteristics of a liability
are:
The liability is the present obligation
of a particular entity.
The liability arises from past
transaction or event.
The settlement of the liability
requires an outflow of resources
embodying economic benefits.
3.
PRESENTATION OF CURRENT
LIABILITIES
Karen Yvonne Bilon
NONCURRENT LIABILITIES
The term "noncurrent liabilities" is also a
residual definition. PAS 1, paragraph 69,
provides that all liabilities not classified as
current are classified as noncurrent.
Definition of equity
Zharmaine Urbanozo
Equity
It is the residual interest in the assets of
the enterprise after deducting all its
liabilities.
Generally speaking, the definition of equity
can be represented with the accounting
equation:
Shareholders equity
It is the residual interest of owners in the net
assets of a corporation measured by the excess
of assets over liabilities.
It represents the net value of a company, or
the amount that would be returned to
shareholders if all the company's assets were
liquidated and all its debts repaid.
Shareholders Equity = Total Assets Total
Liabilities
Forms of Statement of
Financial Position
1. Report Form
This form sets forth the three major
sections in a downward sequence of
assets, liabilities and equity.
2. Account Form
The assets are shown on the left side
and the liabilities and equity on the right
side of the statement of financial
position.
Report
Form
Account Form
LINE ITEM
Line item basically refers to such
piece of information which has its
own weight and should be presented
on a separate line on any document.