In this section…
In this section we shall identify the different components of a set of financial statements that have been prepared using International Financial Reporting Standards. We shall then look at the following three statements and explain what they record, how they are prepared and how they should be presented.
- The statement of financial position
- The statement of profit or loss and other comprehensive income
- The statement of changes in equity
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3.01 Financial Statements
- The different statements in a set of financial statements
- The purpose of financial statements
- The basis of preparation
- Information to be provided in a set of financial statements
- Frequency of reporting
3.02 The Statement of Financial Position
- What it records
- Lines in the statement
- Current and non-current assets and liabilities
- Notes to the financial statements
- Alternative layouts
3.03 The Statement of Profit or Loss and Other Comprehensive Income
- What it records
- Comparison with the statement for a sole trader or partnership
- Other comprehensive income
- Realised and unrealised transactions
- Examples
- Alteranative layouts
3.04 The Statement of Changes in Equity
- What it records
- Equity
- Layout
- Dividends
3.05 Common adjustments – Inventories
- Valuation of inventory
- Recording inventory
- Effect on inventory on financial statements
3.06 Common adjustments – Revaluations
- Revaluations
- Recording an upward revaluation of an asset
- Recoding a downward revaluation of a previously revalued asset
3.07 Common adjustments – Tax
- Recording the corporation tax charge for the period
- Adjusting for under- and over-provisions of corporation tax in a previous period
3.08 Common adjustments – Accruals and Prepayments
- Recording accrued expenses and accrued income
- Recording prepaid expenses and prepaid income
3.09 Illustration of the Statement of Profit or Loss and Other Comprehensive Income
- Preparing a statement of profit or loss and other comprehensive income from a trial balances
3.10 Illustration of the Statement of Changes in Equity
- Preparing a statement of changes in equity from a trial balance
3.11 Illustration of the Statement of Financial Position
- Preparing a statement of financial position from a trial balance
3.12 Financial Statements – additional questions
- Questions on the preparation of the following financial statements using a trial balance and further information
- Statement of profit or loss & other comprehensive income
- Statement of changes in equity
- Statement of financial position