15
Revenue
x
Cost of Sales
(x)
Gross profit x
Other income
x
Distribution costs (x)
Administrative expenses (x)
Other expenses
(x)
Profit
X
Table 2.3: Example of classification of expenses by FUNCTION, based on expense method
provided in paragraph 92 of IAS 1.
From: Applying International Accounting Standards (2005), page 568
Conversely when referring to Alfredson
et
al
(2005,
p.68),
the
definition
of
expense
itself
include
both
losses
and
expenses
that
result
from an
ordinary
course of an entity. While
losses represent other
items that
meet the definition
of expenses and
may or
may
not occur
from in the
route of economic activities
of an entity.
2.1.3 Statement of Changes in Equity
Changes
in owner’s equity during the specified period of
time such as a
month
or a year are being summarized in the statement of changes of equity (Hongren
& Harrison, 2007 p.19). To what we can
summarize, there are several factors
affecting
the
decrement
or
increment in
owner’s
equity.
Factors
such
as
investments
made
by
owner
and
the
net
income
can
caused owner’s
equity
to
increase.
On
the
other
hand,
things
such
as
net
loss
and
owner
withdrawals
may lead to the decrement of owner’s equity. In addition, when refer to
 |