Defn

This query is : Resolved

RAJASEKHAR (Querist)
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10 November 2009 Dear sir/madam,

Pleas give the definition for the following.1.Expenses
2.Loss
3.Income
4.Revenue
5.Profit

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Guest (Expert)

11 November 2009 Refer to AS 9
Revenue Recognition.

shakuntala chhangani

shakuntala chhangani (Expert)
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11 November 2009 1.Expenses :Expense is a decrease in economic benefits during the accounting period in the form of outflows, depletion of assets or incurrence of liabilities that result in decrease in equity. expenses arise in the ordinary course of businesslike COGS,wages, depreciation, salary etc.
2.Income : Income is increase in the economic benefits during the accounting period in the form of inflow of cash or enhencement of assets or decrease in liabilities.the definition of income encompasses revenue and gains.
3.Revenue : Revenue is an income that arise in the ordinary course of activities of an enterprise e.g. sales, fees, interest, royalty, rent etc.
4.Gains : Gains are also income which may or may not arise in the ordinary course of activities of an enterprise e.g.profits on disposal of fixed assets. gains are shown as a separate line in the statement of income to distinguish from regular income as required by AS 5.
5.Loss : Losses may or may not arise in the ordinary course of activity of an enterprise e.g.loss on disposal of fixed assets, loss due to disaster or fire etc. losses are shown as a separeate line in the statement of income to distinguish them from regular expenses.
6.Profit :Income-Expenses including losses
Income and expenses are elements of financial statements. these are not defined in AS 9. AS 9 only considers the items on which this Standard is applicable (as it specifically excludes Gains whether realised or not). Thanks and regards,
CA Shakuntala Chhangani

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