Lecture 2: Presentation of Financial Statements PDF

Presentation of financial statements Lecture 2 1 Recap from last lecture 1. Introduction of IFRS 2. Need and importance of IFRS 3. Implications of IFRS Topics to be covered today 1. Meaning of financial statements and its presentation. 2. Types...

Presentation of financial statements Lecture 2 1 Recap from last lecture 1. Introduction of IFRS 2. Need and importance of IFRS 3. Implications of IFRS Topics to be covered today 1. Meaning of financial statements and its presentation. 2. Types of financial statements. 3. Importance and need of effective presentation of financial statement.  IAS 1 IAS 1 provides guidelines on the presentation of the “general purpose financial statements,” thereby ensuring comparability both with the entity’s financial statements of previous periods and with those of other entities. “General purpose financial statements” are those intended to meet the needs of users who are not in a position to demand reports that are tailored according to their information needs. Definitions International Financial Reporting Standards (IFRS) International Accounting Standards Board (IASB) International Accounting Standards Committee (IASC) Standing Interpretations Committee (SIC) International Financial Reporting Interpretations Committee (IFRIC) Owners Profit or loss Purpose of financial statements Financial statements provide stakeholders with information about the Entity’s financial position Financial performance and cash flows by providing information about its assets Liabilities Equity Income and expenses Other changes in equity and cash flows Components of financial statements Components of financial Statements Cash Flow Statement of Income Statement Notes Statement Changes in Equity All changes in Operating and Income and equity and other Accounting policies investing inflows expenses than those with &explanatory notes and outflows equity holders General features Fair Presentation and Compliance with IFRS Management has concluded that the financial statements present fairly the entity’s financial position, financial performance, and cash flows; The entity has complied with all applicable IFRS, except that it has departed from a particular requirement to achieve fair presentation For each period presented, the financial effect of the departure on each item in the financial statements that would have been reported in complying with the requirement. Going concern. Accrual basis of accounting Materiality and aggregation. Offsetting Frequency of reporting Consistency of presentation Structure and content A statement of financial position as at the reporting date A statement of profit or loss and other comprehensive income for the period A statement of changes in equity for the reporting period A statement of cash flows for the reporting period Notes, comprising a summary of significant accounting policies and other explanatory information A statement of financial position as at the beginning of the earliest comparative period when the reporting entity applies an accounting policy retrospectively or makes a retrospective restatement of items in its financial statements, Objectives for financial statement presentation Cohesiveness Disaggregation liquidity and financial flexibility Presentation of financial statements(Balance Sheet) Presentation of financial statements(Balance Sheet) Profit and loss account Comprehensive statement  Summary 1. Meaning of financial presentation 2. Types of financial statements 3. Its presentation. 4. Examples of financial statements.