Expenses
EXPENSES
ANANDA CHAIRUNNISA
ISA ANDRIA RAHMAN
MEGA PUSPITASARI
MELISA ANGGRENI
NOPITA AULIA SIREGAR
SAPPHIRA JULIA SAPUTRI
1. Expense Defined
In accounting, expense has a very specific meaning. It is an outflow of cash or other valuable assets from a person or company to another person or company. This outflow of cash is generally one side of a trade for products or services that have equal or better current or future value to the buyer than to the seller. Technically, an expense is an event in which an asset is used up or a liability is incurred. In terms of the accounting equation, expenses reduce owners ' equity. The International Accounting Standards Board defines expenses as decreases in economic benefits during the accounting period in the form of outflows or depletions of asset or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity participants.
Expenses encompass losses as well as expenses which arise in the course of ordinary activities of the entity. Framework says that losses represent decreases in economic benefits and are therefore not different in nature from other expense.
The FASB distinction between expense and losses does not seem to be very useful. It requires a judgment about whether a transaction is a part of the entity’s ongoing major or central operations. Not having to distinguish between expenses and losses has distinct advantages management will no longer be able to decide that an outflow of assets is a loss and omit it from the determination of operating profit.
1.1. Changes in assets and liabilities
Expenses are related to the value aspect of assets and liabilities. Revenues and expense come about because of events increase in the value of liabilities or decrease in the value of assets. We can say the expenses appears from the changes in asset if there is a transaction that decrease an asset or cause the outflow from economic source. Uses of
ANANDA CHAIRUNNISA
ISA ANDRIA RAHMAN
MEGA PUSPITASARI
MELISA ANGGRENI
NOPITA AULIA SIREGAR
SAPPHIRA JULIA SAPUTRI
1. Expense Defined
In accounting, expense has a very specific meaning. It is an outflow of cash or other valuable assets from a person or company to another person or company. This outflow of cash is generally one side of a trade for products or services that have equal or better current or future value to the buyer than to the seller. Technically, an expense is an event in which an asset is used up or a liability is incurred. In terms of the accounting equation, expenses reduce owners ' equity. The International Accounting Standards Board defines expenses as decreases in economic benefits during the accounting period in the form of outflows or depletions of asset or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity participants.
Expenses encompass losses as well as expenses which arise in the course of ordinary activities of the entity. Framework says that losses represent decreases in economic benefits and are therefore not different in nature from other expense.
The FASB distinction between expense and losses does not seem to be very useful. It requires a judgment about whether a transaction is a part of the entity’s ongoing major or central operations. Not having to distinguish between expenses and losses has distinct advantages management will no longer be able to decide that an outflow of assets is a loss and omit it from the determination of operating profit.
1.1. Changes in assets and liabilities
Expenses are related to the value aspect of assets and liabilities. Revenues and expense come about because of events increase in the value of liabilities or decrease in the value of assets. We can say the expenses appears from the changes in asset if there is a transaction that decrease an asset or cause the outflow from economic source. Uses of
References: http://www.accountingcoach.com/blog/expense-affect-balance-sheet http://www.accountingcoach.com/blog/cost-expense http://en.wikipedia.org/wiki/Expense http://www.accountingtools.com/questions-and-answers/what-is-the-difference-between-cost-and-expense.html http://www.scribd.com/doc/93609032/Teori-Akuntansi-Expensses