SAIFAC No. 3 Elements of Financial Statements in AI-Intensive Enterprises

Purpose and Scope:

This statement aims to define the terms and elements in financial statements specifically related to entities that have a significant stake in AI development, application, or are influenced by AI operations.

1. AI Assets:

• Resources controlled by an entity as a result of past AI-related events and from which future economic benefits are expected to flow to the entity. This includes AI software, proprietary algorithms, and related data sets.

2. AI Liabilities:

• Present obligations of the entity arising from past AI-related events, the settlement of which is expected to result in an outflow of resources embodying economic benefits. This may include legal obligations from AI failures or breaches.

3. AI Equity:

• The residual interest in the AI assets of the entity after deducting AI liabilities. This might include the valuation of AI intellectual property owned by the entity.

4. AI Revenue:

• Inflows or other enhancements of assets of an entity or settlements of its liabilities during a period from delivering or producing AI products, rendering AI services, or other AI-related activities.

5. AI Expenses:

• Decreases in economic benefits during an accounting period in the form of outflows, depletions of assets, or incurrences of liabilities that result in decreases in equity, excluding those relating to distributions to equity participants. This encompasses costs of AI R&D, AI system maintenance, and AI-related regulatory fines.

6. AI Commitments:

• Future responsibilities the entity has committed to in the realm of AI, which may or may not result in future AI liabilities.

7. AI Contingencies:

• Potential AI liabilities that arise from past events and will only be confirmed by the occurrence or non-occurrence of uncertain future events not wholly within the control of the entity.

Updates and Amendments:The SAIFAC guidelines will undergo regular reviews and modifications to reflect advancements in AI technology, evolving financial practices within AI-intensive entities, and feedback from stakeholders and the public.

Note: This is a fictional representation and does not represent any real-world standard for AI. The development of such standards would involve extensive consultations with experts, stakeholders, and the public. Fictional representations simplify complex AI concepts, stimulate discussion, envision future scenarios, highlight ethical considerations, encourage creativity, bridge knowledge gaps, and set benchmarks for debate in fields like accounting.