Assets Flashcards
1
Q
What is an Asset?
A
a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity
2
Q
Characteristics for an asset
A
- The resource must be controlled by the entity
○ The capacity of the entity to benefit from the asset in the pursuit of its objectives, and to deny or regulate the access of others to the benefit - The resource must be as a result of a past event
- Future economic benefits are expected to flow to the entity from the resource
3
Q
Recognition of an Asset
A
○ Probable
- It is more likely that future economic benefits will flow from the asset to the business controlling it
○ Reliably Measured
-The value of the asset can be measured reliably
- Involves the use of estimates
4
Q
How are assets classified?
A
according to their nature or function
5
Q
Classifications of assets can reflect (5)
A
○ Liquidity ○ Marketability ○ Physical characteristics ○ Expected timing of future economic benefits ○ Purpose