Chapter 3 : Statement of financial position (SOFP) Flashcards
IAS 1
Purpose of financial statements
Complete set of financial statements
PnL, SOFP, Cashflows, notes, changes in equity
financial statements shall present fairly the financial position, financial performance and cash flows
IAS1 compliance with fundamental concepts
Accruals
Going concern
Consistency - of presentation and classification
Offsetting - assets and liabilities should not be offset unless required or permitted the relevant standard
Materiality and aggregation - each material class or similar items should be presented separately in financial statements
presenting current assets
IN ORDER OF LIQUIDITY
Total assets and liabilities = total assets
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dr, cr - issue of nominal shares
Dr Bank
Cr Share Capital
dr, cr- issuing shares at a premium
Dr - Bank
Cr - Share Capital
Cr - Share Premium
dr, cr - Bonus issues of shares (no money coming in)
Dr - Share premium account
Cr - Share Capital
in proportion to their existing shares
dr, cr - rights issue of shares
Dr - Bank
Cr - Share premium
Cr - Share Capital
disclosure of shares
Normally in the notes of the financial statements:
Number of shares authorised
Number of shares issued and paid for
Nominal value of the share
Class of shares (ordinary& preference)
dividends are usually paid :
Interim (mid year)
Final (end of year)
recording dividends
DECLARATION DATE of the dividend
Drafting financial statements - if one side of the double entry would affect SPL, this will increase or decrease retained earnings
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Drafting SOFP
Review performas given
workings - each piece of additional information you are given below TB, consider the double entry
Enter figures from TB into performa or working boxes
Post double entries from journals
Complete workings and enter figures onto the face of the SOFP
