Required financial statements:
- Balance sheet
- Statement of comprehensive income
- Cash flow statement
- Statement of changes in owner’s equity
- Explanatory notes
Features for preparing financial statements according to IAS
- Fair presentation:
- effects of entities transactions and events for recognizing assets, liabilities, revenues, expenses.
- Going concern basis:
- The firm will continue to exist unless its management intends to liquidate it.
- Accrual basis:
- Financial statement rather than statement of cash flow
- Consistency
- between period in how items are presented and classified.
- Materiality:
- Free of misstatement or omission that could influence decision of users of financial statement
- Aggregation
- Of similar items and separation of dissimilar items
- No offsetting
- of assets against liabilities or income against expense.
- Reporting frequency:
- at least annually
- Comparative information
- for prior period should be included
Structure and content of a financial statement
- Should present classified balance sheet showing current and noncurrent assets.
- Minimum information: is required on the face of each financial statement
- Balance sheet: cash or cash equivalent
- Income statement: revenue, profit or losses,…
- Comparative information for prior period should be included.