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Assets = Liabilities + Equity

Assets = Liabilities + Equity.

This equation is fundamental to accounting. This relationship even has a name, "the accounting equation".

You can refer to these three funamental concepts using different names, for example "Equity" is sometimes called capital, stockholders' equity, owner's equity, member equity, partner capital, or even other terms. But, at their essence, all are really equity.

This is the tip of the semantic iceberg of financial reporting.  So why is this relation not expressed in the US GAAP Taxonomy? Does the software application which you use to create XBRL based financial reports understand this equation or business rule?

Posted on Friday, August 3, 2012 at 08:18AM by Registered CommenterCharlie in | CommentsPost a Comment

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