Final answer:
A component is a distinct part or element of a larger system, often referred to in financial reporting under IFRS and ASPE as elements like assets or liabilities.
Step-by-step explanation:
The definition of 'component' refers to a distinct part or element of a larger system that is created or modified by humans usually for a practical purpose. When considering the International Financial Reporting Standards (IFRS) and Accounting Standards for Private Enterprises (ASPE), a component might be a key element of a financial reporting model or a unit within a set of financial statements, such as assets, liabilities, or equity components. This term is significant as it relates to how various parts of an organization's financial picture are segmented and reported.