Lec-25 - record and reported in the financial statement for...

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Advanced Financial Accounting FIN-611 Mian Ahmad Farhan Lecture-25 IASB Frame-work
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IASB Frame-work
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International Accounting Standard Board
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Financial Statements 1. Balance sheet 1. Income statement 1. Statement of changes in equity 1. Cash-flow statement 1. Notes
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Balance sheet Financial position Income statement Financial performance Statement of changes in equity Movement In different heads of owner’s equity Cash-flow statement Movement in cash inflow and cash outflow Notes Significant accounting policies and explanatory notes Financial Statements
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Qualitative Characteristics of Financial Statements
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Going concern The entity will continue its operations for the foreseeable future and there is no intention to liquidate or significantly curtail its operations.
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Accrual base Incomes and expenditures arenot measured at the amount of cash received or paid during the year but for incomes the measurement bases are earning and for expenses measurement bases are incurrence. These are recorded in the accounting
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Unformatted text preview: record and reported in the financial statement for the period to which they relate. Materiality Information is material when its omission or misstatement could change the decisions of users. Qualitative Check Materiality 1. Relevancy 2. Reliability 3. Comparability 4. Understanding Qualitative characteristics that make financial presentation useful Qualitative characteristics that make financial information useful Relevancy The financial statement are relevant for decision making Purpose for the use of financial statement. Values to be relevant 1. Predictive value 2. Confirmative value Reliability How much faithfully the financial statement representing the transaction. Five Characteristics of Reliability 1. Faithful representation 2. Substance over form 3. Neutralability 4. Prudence 5. Completeness Constraints / Limitations relating to Relevancy & Reliability 1. Timeliness 2. Balance between the benefit and cost 3. Balance among the different characteristics...
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Lec-25 - record and reported in the financial statement for...

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