An expense is a decrease in assets or an increase in liabilities, that results in decreases in
equity other than those relating to distributions to holders of equity claims.
I understand the first part of the definition but this "those relating to distributions to holders of equity claims." part I don't understand.
kindly explain
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expense definition ?
4y ago#1Distributions to equity holders are dividends. If a company pays dividends then the equity reduces but the dividends are not an expense.
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thank you sir
4y ago#3You are welcome.
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