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FASB exposes financial statement element definitions

Defining Issues | November 2020

The proposals would revise the conceptual definitions of assets, liabilities, revenues and gains, amongst others.


The FASB’s proposed definitions seek to clarify and improve the definitions of financial statement elements.


  • All entities subject to US GAAP

Relevant dates

  • July 16, 2020 – FASB issued proposed Statement
  • November 13, 2020 – Comments due on proposed Statement

Key Impacts:

  • The proposed Chapter to CON 8, Conceptual Framework for Financial Reporting, defines 10 elements of financial statements and would replace CON 6, Elements of Financial Statements.
  • The proposed Chapter would establish concepts that the FASB would use in developing standards of financial accounting and reporting.
  • The proposals aim to clarify and improve the definitions of financial statement elements by:
    • Clearly identifying the right or obligation that gives rise to an asset or a liability
    • Eliminating terminology that purports to make the definitions of assets and liabilities difficult to understand and apply
    • Clarifying the distinction between liabilities and equity, and between revenues and gains and expenses and losses
    • Modifying the distinctions in equity for not-for-profit entities. 

Download the document

KPMG comment letter

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Accounting Research Online

Access our accounting research website for additional resources for your financial reporting needs.

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