GLOSSARY of Accounting Terms – E

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Economic life

Either:

1. the period over which an asset is expected to be economically usable by one or more users; or
2. the number of production or similar units expected to be obtained from the asset by one or more users.

Equity

The residual interest in the assets of the entity after deducting all its liabilities.

Events after the balance sheet date

Those events favourable and unfavourable, that occur between the balance sheet date and the date when the financial statements are authorised for issue. Two types of events can be identified:

1. those that provide evidence of conditions that existed at the balance sheet date (adjusting events after the balance sheet date); and
2. those that are indicative of conditions that arose after the balance sheet date (non-adjusting events after the balance sheet date).

Exchange difference

The difference resulting from translating a given number of units of one currency into another currency at different exchange rates.

Exchange rate

The ratio of exchange for two currencies.

Expenses

Decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrences of liabilities that result in decreases in equity, other than those relating to distributions to equity participants.