12
Conversely,
Based on Hoggett et all
(2003, p.35), assets are
“future economic
benefits controlled by the entity as a result of past transactions or other events”.
On the other hand when referring to IASB framework paragraph 89
(International Financial reporting Standard 2005),”an asset
is recognized
in
the
balance sheet when it is probable that the future economic benefits will
flow to
the
entity
and
the
asset
has
a
cost
or
value
that
can be measured
reliably”.
Additionally, Hoggett et all
(2003,
p.35)
define
liabilities as “the future
sacrifices
of
economic
benefits
that
an
entity
is presently
obliged
to
make
to
other
entities
as
a
result
of
past
transaction
or
other
events”.
According
to
IASB
framework paragraph 91 (International Financial
reporting Standard
2005), “a liability us recognized in the balance sheet when it is probable that an
outflow
of
resources
embodying
economic
benefits
will
result
from the
settlement of a present obligation and
the amount at which the settlement will
take
place
can
be
measured
reliably”. Last
but
not
least, Hogget
et
all
(2003,
p.692) defines
the
last
item in the balance sheet, equity as
“the residual
interest
in the assets of the entity after the deduction of its liabilities”.
2.1.2 Income Statement
Income statement represents the company’s operating performances through
its
net
income
indicating
profit
or
loss. On
the
other
hand,
the
expenses
and
revenue occurred
for specific periods are also
included
in the
income statement
as
part
of
net
income
calculation.
The
net
income
itself
is
achieved
when
all
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