Which of the following is correct about the concept of 'control' in the recognition of assets?
A) Control relates to the capacity of a reporting entity to benefit from an asset and to deny or regulate the access of others to the benefit.
B) The capacity to control would not normally stem from legal rights.
C) Control is not required before an asset can be shown within the body of an entity's balance sheet (statement of financial position).
D) Controlled assets are always owned.

Question

Quizplus · Accepted Answer

Control in the recognition of assets refers to the ability of a reporting entity to benefit from an asset and to prevent or regulate the access of others to the benefit. This control can result from legal rights or other means, such as controlling the physical use of an asset. Therefore, option A is the correct answer. Option B is incorrect because legal rights can often be the source of control over an asset. Option C is incorrect because control is a necessary condition for an asset to be recognized in the balance sheet. Option D is incorrect because an asset can be controlled without being owned, such as a leased asset.

Which of the Following Is Correct About the Concept of 'Control