Module 2 - Financial statements I.docx - BALIUAG UNIVERSITY CPA Review Program Theory of Accounts(FAR\/AFAR \u2013 Principles Module 2 Financial Statements

Module 2 - Financial statements I.docx - BALIUAG UNIVERSITY...

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BALIUAG UNIVERSITYCPA Review ProgramTheory of Accounts (FAR/AFAR – Principles)_____________________________________________________________________________________________Module 2: Financial Statements – Part 1LVCI.Presentation of Financial Statement (IAS 1)Objective of financial statementsThe objective of general purpose financial statements is to provide information about the financial position,financial performance, and cash flowsof an entity that is useful to a wide range of users in making economicdecisions. To meet that objective, financial statements provide information about an entity's:AssetsLiabilitiesEquityIncome and expenses, including gains and lossesContributions by and distributions to owners (in their capacity as owners)Cash flows.These information, along with other information in the notes, assists users of financial statements in predicting theentity's future cash flows and, in particular, their timing and certainty.Components of financial statementsA complete set of financial statements includes:a.Statement of financial position (balance sheet) at the end of the periodb.Statement of profit or loss and other comprehensive income for the periodc.Statement of changes in equity for the periodd.Statement of cash flows for the periode.Notes to financial statementsf.Comparative information prescribed by the standardg.When an entity applies an accounting policy retrospectively or makes a retrospective restatement ofitems in its financial statements, or when it reclassifies items in its financial statements, a statement offinancial position as at the beginning of the preceding period.An entity may use titles for the statements other than those stated above. All financial statements are requiredto be presented with equal prominence.An entity is required to present at least two of each of the primary financial statements.II.Statement of Financial Position (IAS 1)Definitions of the elements relating to financial position(Conceptual Framework)Recognition of assets and liabilities(Conceptual Framework)Current and non-current classificationAn entity must normally present a classified statement of financial position, separating current and non-currentassets and liabilities, unless presentation based on liquidity provides information that is reliable.In either case, if an asset (liability) category combines amounts that will be received (settled) after 12 monthswith assets (liabilities) that will be received (settled) within 12 months, note disclosure is required thatseparates the longer-term amounts from the 12-month amounts.
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  • Fall '17
  • Ma'am Terese de Guzman
  • Balance Sheet, Generally Accepted Accounting Principles

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