L4: Financial Statements

Question 1

Whats the objective of financial statements, according to IAS1?

Answer 1

” to provide information about the financial position, financial performance and cash flows of an entity that is useful to a wide range of users in making economic decisions”

Question 2

What are all the components of financial statements?

Answer 2

1. SoFP
2. SoPL and other Comprehensive Income
3. Statement of Changes in Equity
4. Statement of Cash Flows
5. Notes

Question 3

General features of financial statements

Answer 3

• Fair presentation
• Compliance with international standards
• Going concern basis
• Accruals basis
• Materiality and aggregation
• Offsetting
• Frequency of reporting
• Comparative information
• Consistency of presentation

Question 4

What information is presented in Comprehensive income?

Answer 4

• revenue
• finance costs
• tax expense
• profit or loss from discontinued operations
• profit or loss for the period
• Total comprehensive income for the period.

Question 5

What information is presented in Statement of Changes in equity?

Answer 5

– total comprehensive income for the period;
– effects of any changes in accounting policies;
– share issues;
– dividends paid.