Under the IASB Conceptual Framework income is now subdivided into:

Question

Quizplus · Accepted Answer

Under the IASB Conceptual Framework, income is subdivided into two elements: revenues and gains. Revenues arise in the course of the ordinary activities of an entity, while gains may or may not arise in the course of ordinary activities. This subdivision is important because it helps users of financial statements to understand the nature and sources of an entity's income. Choice A is incorrect because gains are not the same as revenues. Choice B is incorrect because revenues can arise from sources other than ordinary activities. Choice D is incorrect because increases in equity and reductions in liabilities do not correspond to gains and revenues, respectively.

Under the IASB Conceptual Framework Income Is Now Subdivided Into