Essential Characteristics of Assets:

IASB defines an asset as a resource controlled by an entity as a result of past events, from which future economic benefits are expected to flow to the entity. The essential characteristics of this definition include:

1. Control over the Resource: Emphasizes control rather than ownership, indicating the entity’s ability to restrict others from using the asset.
2. Focus on Substance over Form: Assets are recognized based on the substance of transactions rather than legal form.
3. Link to Past Events: The definition refers to resources resulting from past transactions or events, thus excluding potential future assets.
4. Expectation of Economic Benefits: The asset is expected to bring future economic benefits to the entity.

Features of Liabilities in Accordance with IAS 1:

IASB defines a liability as a present obligation arising from past events, the settlement of which is expected to result in an outflow of resources embodying economic benefits. Characteristics include:

1. Mirror Image of Assets: Liabilities represent obligations opposing the concept of assets.
2. Present Obligation: The entity has a current responsibility that exists as of the reporting date.
3. Legally Enforceable Obligations: Obligations are typically enforceable by law, requiring settlement.
4. Inclusion of Provisions and Contingencies: Liabilities may arise from provisions and contingent liabilities, such as warranties or other obligations that may require future settlements.