Chapter 12 - Company financial statements under IFRS Accounting Standards Flashcards

1
Q

Q: What does the statement of changes in equity explain?

A

A: It explains how the equity section of the Statement of Financial Position has changed during the reporting period.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
2
Q

Q: What does IAS 1 require companies to do regarding the statement of changes in equity?

A

A: IAS 1 requires companies to prepare a statement of changes in equity as one of the primary financial statements.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
3
Q

Q: What key components should be shown in the statement of changes in equity?

A

A: The statement should include:

  • Total comprehensive income for the period (profit or loss).
  • Transactions with owners, showing contributions (e.g., share capital issues) and distributions (e.g., dividends).
  • A reconciliation for each component of equity (e.g., share capital, share premium, retained earnings, and other reserves).
How well did you know this?
1
Not at all
2
3
4
5
Perfectly
4
Q

Q: What are the key components of equity included in the statement of changes in equity?

A

A: The key components are:

Share capital
Share premium
Retained earnings
Other reserves

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
5
Q

Q: How do movements in share capital occur?

A

A: Movements in share capital result from cash share issues and bonus issues.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
6
Q

Q: What causes movements in retained earnings?

A

A: Movements in retained earnings occur from:

Profits earned during the year.
Dividends paid to equity owners.
Bonus issues of shares.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
7
Q

Q: How does the approach to preparing the statement of changes in equity differ from other primary financial statements?

A

A: The statement of changes in equity uses information already contained in the Statement of Profit or Loss and the Statement of Financial Position to explain how equity has changed in the period.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
8
Q

Q: What must be used to prepare the statement of changes in equity?

A

A: Information relating to transactions and balances already recorded in the Statement of Profit or Loss and the Statement of Financial Position must be used.

How well did you know this?
1
Not at all
2
3
4
5
Perfectly
9
Q

What does a statement of changes in equity for the reporting period look like

A

Table with columns
1. SC
2. SP
3. RE
4. Other Reserves
5. Total

Table with rows
1. Balance as at 1 Jan 20X1 (YEAR START)
2. Issue of SC
3. Dividends
4. Profit/(loss) for the year
5. Balance as at 31 Dec 20X1 (YEAR END)

How well did you know this?
1
Not at all
2
3
4
5
Perfectly