Preparation of Financial Statements

Question 1

general reporting requirements

Answer 1

the Corporations Act 2001 requires that a company prepare an annual financial report

• concise report
• interim financial report

Question 2

external reporting requirements for a statement of profit or loss and other comprehensive income

Answer 2

entities may choose to present the statement of profit or loss and other comprehensive income as a single statement

entities shall disclose sufficient information

separate disclosure of many categories of expenses

Question 3

external reporting external reporting requirements for a statement of financial position

Answer 3

standard an entity must classify an asset as current when it satisfies one of the following conditions

• it expects to realise the asset, or intends to sell or consume it, in its normal operating cycle
• it holds the asset primarily for the purpose of trading
• it expects to realise the asset within twelve months after the reporting period
• the asset is cash or a cash equivalent

Question 4

external reporting external reporting requirements for a statement of changes in equity

Answer 4

must disclose

• the total comprehensive income for the reporting period
• profit or loss
• transactions with owners in their capacity as owners

the closing balance of the reserve accounts is shown in the statement of changes in equity