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F1 > Presentation of Published Financial Statements > Flashcards

Presentation of Published Financial Statements Flashcards

1
Q

What are the contents of financial statements?

A
  • Statement of profit/loss + other comprehensive income(SPL)
  • Statement of financial position (SOFB)
  • Statement of cash flow (SOCE)
  • Statement of changes in equity(SCF)
  • Notes - summary of significant policies and other info
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2
Q

What is the information do financial statements aim to provide

A

Show
- Financial position
- Financial performance
- Cash flow of entity
- Stewardship of resources

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3
Q

What are the requirements of financial statements?

A
  • Faithful representation as in the conceptual framework
  • Use applicable international financial reporting standards (IFRS)
  • Accounting policy choices selected should be per IAS 8
  • Presented in a relevant, reliable, comparable and understandable way
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4
Q

What is meant by going concern basis

A
  • Assumes entity will continue to trade for the foreseeable future- at least 12 months
  • No intention to liquidate the entity or cease trading
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5
Q

What should happen if management is aware of material uncharacteristic which can affect going concern?

A
  • Disclose of those uncertainties in statements
  • Still can use going concern basis
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6
Q

What basis is used if an entity is not going to be continuing operations?

A
  • Break up basis
  • disclose the basis
  • give the reason why the entity is not going concern
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7
Q

What is the accrual basis of accounting

A
  • An entity shall prepare its financial statements by recognising assets, liabilities, equity income and expenses when they meet the criteria for those elements
  • rather than when cash is transferred( accruals basis is not applicable to statement of cash flows)
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8
Q

What is the structure of the statement of financial position?

A
  1. Assets
  2. Equity
  3. Liabilities
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9
Q

What is under the assets section of SOFP

A

Non-current assets: PPE, Goodwill, Other intangible assets

Current assets: Inventories, Trade receivables, other current assets, Cash and cash equivalents

Total assets

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10
Q

What i included in the equity section of the SOFP

A

Share Capital
Share premium
Retained Earnings
Revaluation Surplus
Total Equity

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11
Q

What is included in the liabilities section in the SOFP

A

Non-current Liabilities: Long-term borrowings
Total non- current liabilities

Current Liabilities: Trade and other payables, Short term borrowings, Current tax payables
Total current liabilities

Total Liabilities

Total equity and liabilities

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12
Q

What details are included at the top of financial statements

A
  • Name of entity
  • Title of financial statement
  • At what date
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13
Q

How can statment of profit/loss and other comprehensive income be presented?

A

In two ways:
1. In a single statement including both
2. In two statements - separating P/L and OCI

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14
Q

What is the structure of the Statement of P/L and other comprehensive income?

A
  1. Revenue (cost of sales, gross profit, distribution costs, admin expense)
  2. Finance Costs
    profit before tax
  3. Income tax expense
  4. Profit for year
  5. Other comprehensive income (gains/losses on property revaluation)
  6. Other comprehensive income for the year
  7. total comprehensive income for the year
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15
Q

What is included in the cost of sales

A
  • opening inventory
    + Purchases
  • less closing inventory
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15
Q

What details are required at the top of the Statement of P/L Other comprehensive income?

A

Name of entity
Title of statement
FOR which period

16
Q

What is gross profit

A

Revenue - Cost of sales

17
Q

What are the two ways expenses can be categorized on financial statements?

A

By function
By Nature

18
Q

awareness -How is SPL & other comprehensive income categorised by nature laid out

A
  1. Revenue
    - changes in inventories of finished goods & works in progress
    - raw materials and consumables used
    - employees benefits expense
    - depreciation and amortisation expense
    - impairment of PPE
    - total expense
  2. Finance Costs
    - profit before tax
  3. Income tax expense
  4. Profit for the year
    other comprehensive income:
    gains/losses on property reveal
  5. Other comprehensive income
  6. Total comprehensive income
19
Q

What does the statement of changes in equity show

A
  • Reconciles equity section from SOFP from last year to this year
  • Can be a primary financial statement or as a note
20
Q

What is the structure of the statement of changes in equity?

A

Columns: share capital, share premium, reval surplus, retained earnings, total

Rows
1. Balance at the previous period
2. changes in equity:
Issues of share capital, Dividends, Total comprehensive income for the period, transfer to retained earnings
3. Balance this period

21
Q

What is the purpose of notes after financial statements

A
  • Provide more detail
    Examples:
  • Profit for period - after crediting Depreciation, Impairement, profit on disposal of PPE, amortisation, research expenditure
22
Q

How do you work out expenses

A

Columns: Cost of sales, Distribution costs, Admin costs

Costs + Purchases
+ (Opening Inventory - Closing Inventory)
- Less depreciation charge

23
Q

How to work out Gross profit

A

Revenue - Cost of sales

24
Q

How to work out profit before tax?

A

Gross profit - Distribution costs - Admin costs - Finance Costs

25
Q

What are finance costs?

A

Interests of liabilities - go on the SPL

26
Q

How to work out Profit for the year

A

Profit before tax - Income tax expense

27
Q

How do you work out retained earnings for the year

A

Retained earnings bought forward previous period end + Profits for the year - Dividends

28
Q

How to work out share capital

A

Number of shares x Share price

29
Q

How to work out profit for year

A

Retained earnings gain + Dividends

30
Q

What needs to be shown on the face of the statement of PL. other comprehensive income

A

revenue
gains and losses from the derecognition of financial assets measured at amortised cost
finance costs
share of the profit or loss of associates and joint ventures accounted for using the equity method
certain gains or losses associated with the reclassification of financial assets
tax expense
a single amount for the total of discontinued operations

31
Q
A

F1 (14 decks)

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