Crime Against Humanity: the Holy GAAP, 22
To help you further expand your ability to confront, it has been said that in order to evaluate a datum, you have to have at least another datum to compare it to. Hard to evaluate a can opener, if it were the only thing existing in the whole universe.
So let’s compare the above with the following:
Interestingly enough, these aforementioned definitions do not apply to financial assets:
An asset is a resource controlled as a result of past events.
A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non−occurrence of one or more uncertain future events not wholly within the control of the entity.
Events and their recordings are two distinct and separate realms. The recording of a sound is not the sound, the memory of a fact is not the fact, and the book entry of an economic fact is not the economic fact. Events occur, recordings record their occurrence. The recordings of facts, whether in recorders, minds or books, are not the facts, and do not substitute them. Quite to the contrary, the fact is the requisite of the recording: no fact, no recording, as there’s nothing to record in the first place.
Accounting, financial statement included, is a recording tool. It records the economic facts significant to an entity, quantifying them in terms of money as a unit of account. There is a cause, the economic fact, and there is its effect, the related book entry.
The aforementioned definitions of asset and contingent asset are true to the nature of accounting, as they state that if an entity controls an asset this is the result of past events: something actually occurred in the real world out there that brought that resource under the control of the entity, and later on the related book entry merely records and documents that. If the entity acquires an asset, this is a fact. As such, its acquisition may have a legal relevance, such as a deed for the purchase. Neither of them has anything to do with accounting; accounting comes after the fact and records it as economic fact.
