In accordance with IASB Conceptual Framework which of the following transaction(s)is/are consistent with a definition of income?
A) collection of accounts receivable
B) debt forgiveness
C) issue of share capital
D) collection of accounts receivable and debt forgiveness

Question

Quizplus · Accepted Answer

Debt forgiveness is considered income because it increases the economic benefits to the entity through the reduction of liabilities, which aligns with the IASB Conceptual Framework's definition of income as increases in economic benefits during the accounting period in the form of inflows or enhancements of assets, or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants. Collections of accounts receivable are merely asset exchanges (cash for receivables) and do not increase the economic benefits. The issue of share capital is a transaction with owners in their capacity as owners, not income.

In Accordance with IASB Conceptual Framework Which of the Following