PROPRIETARY THEORY Definition

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PROPRIETARY THEORY is where no fundamental distinction is drawn between a legal entity and its owners, i.e. the entity does not exist separately from the owners for accounting purposes. The primary focus is to report information useful to the owners, and therefore the financial statements are prepared from their perspective. See ENTITY THEORY.

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DEPRECIATION REVERSAL is the reversal of a depreciaton amount in the depreciation reserve account.

LESSOR is the party who conveys specified property to another for a period of time in return for the receipt of rent.

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