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Definition in concept context

5 August, 2015 - 16:47

With respect to the central equation:

  • Assets = Liability + Equity

Liability and Asset share similar adjectives of past , present, and future in their definitions:

  • Arising out of defined past events
  • A present  obligation (liability) / right (asset)
  • for the future  outflow (liability) / in flow (asset) of resources (being the concrete form of abstract economic benefit)

( Equity is defined as assets less liabilities ).

And they both have the same recognition criteria : probable , and measurable.

These definitions may be changed soon, to emphasise concepts such as "presently enforceable" , "present right of control over resources(asset)/obligation of economic burden(liability)", by some accounting bodies.