Element of financial statement
Financial statements are broken down into 10 elements by SFAC 6.

All transactions, events, and other circumstances which affect a business enterprise during a period can be broken down into one of the following:
  • Assets - Probable future economic benefits obtained or controlled by a particular entity as a result of past transactions or events.
  • Liabilities - Probable future sacrifices of economic benefits obtained or controlled by a particular entity as a result of past transactions or events.
  • Equity - Residual interest in the assets of an entity that remain after deducting its liabilities. Called shareholders' equity or stockholders' equity for a corporation, partners' capital for a partnership, or proprietors' interest for a sole proprietorship.
  • Investments by owners - Increases in equity resulting from transfers to it from other entities of something of value to obtain or increase ownership interest in it.
  • Distributions to owners - Decreases in equity of a particular enterprise resulting from transfers to owners.
  • Revenues - Inflows or other enhancements of assets of an entity or settlements of its liabilities during a period from delivering or producing goods, rendering of services, or other such activities that constitute the entity's ongoing major or central operations.
  • Expenses - Outflows or other using up of assets or incurrences of liabilities during a period from delivering or producing goods, rendering of services, or other such activities that constitute the entity's ongoing major or central operations.
  • Gains - Increase in equity from peripheral or incidental transactions of an entity.
  • Losses - Decrease in equity from peripheral or incidental transactions of an entity.
  • Comprehensive income - Change in equity of a business enterprise during a period from transactions and other events and circumstances from nonowner sources. Includes all changes in equity during a period except those resulting from investments by owners or distributions to owners.

These transactions can be grouped into one of the elements above. The following are the relations between the elements:
  • All changes in assets and liabilities which are not accompanied by a change in equity
    • Exchanges of assets for other assets
    • Exchanges of liabilities for other liabilities
    • Acquistions of assets by incurring liabilities
    • Settlements of liabilities by transfering assets
  • All changes in assets or liabilities accompanied by changes in equity
    • Comprehensive income
      • Revenues
      • Gains
      • Expenses
      • Losses
    • All changes in equity from transfers between a business enterprise and its owners
      • Investments by owners
      • Distributions to owners.
  • All changes in equity that do not affect assets or liabilities