economic benefi ts are expected to fl ow to the entity.
Liabilities. A present obligation of the entity arising from past events, the settlement of
which is expected to result in an outfl ow from the entity of resources embodying economic
benefi ts. Liabilities may be legally enforceable via a contract or law, but need not be, i.e.,
they can arise due to normal business practice or customs.
Equity. A residual interest in the assets of the entity after deducting all its liabilities.
Income. Increases in economic benefi ts that result in increases in equity (other than those
related to contributions from shareholders). Income includes both revenues (resulting from
ordinary activities) and gains.
Expenses. Decreases in economic benefi ts that result in decreases in equity (other than
those related to distributions to shareholders). Expenses includes losses that are not the
result of ordinary activities.