14
increases
in equity,
other
than increases
relating
to
contribution
from equity
participants.”
Last, when
refer
to the
IASB Framework paragraph 70 (International Financial
Reporting Standard 2005), expenses are defined
as
“decreases
in
economic
benefits
during
the
accounting
period
in the
form
of
outflows
or
depletion
of
assets
or
incurrence
of
liabilities
that
results
in decreasing
equity,
other
than
those relating to distribution to equity
participants”.
Next,
based
on
IAS
paragraph 88 paragraph 1 (International Financial Reporting Standard, 2007) it
is
necessary for an entity
to present their analysis of expenses
in
the classified
form that is either by their nature (for example: employee benefits,
depreciation, transport costs, purchases of
material
and
advertising
cost)
or
based on
their
function
in
the entity such as cost of
sales, costs of distribution
and
administrative activities whoever provide more relevant and reliable
information.
Revenue
x
Other Income
x
Changes in Inventories of finished goods and work in progress
x
Raw materials and consumables used
x
Employee benefit costs
Depreciation and amortisation expense
x
x
Other expenses
x
Total Expenses
(x)
Profit
x
Table 2.2: Example of classification of expenses by NATURE provided paragraph 91 of IAS 1
From: Applying International Accounting Standards (2005), page 567
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