An international Airline company has placed an order for a new Aircraft. The price between the airline and the manufacturer is fixed, and delivery is to occur in 24 months vith cu
As per the conceptual Framework, an asset is defined as a resource controlled by the entity as a result of past events and from which future economic benefits are expected to flow to the entity. So while most assets will be both controlled and legally owned by the entity , the legal ownership is not a prerequisite for recognition rather it is the control.
On the other hand, a liability is defined as a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits. As per conceptual framework, it should be noted that in order to recognize a liability there does not have to be an obligation that is due on demand but rather there has to be a present obligation.
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