PRESENTATION OF FINANCIAL STATEMENTS AND ACCOUNTING POLICIES
Understand about the first time adoption of SLFRS
Explain the purpose and composition of corporate financial statements;
Describe selection, application and changes in accounting policies of companies; and
Assess implications of accounting policy choices made by companies.
LKAS-1 sets out overall requirements for the presentation of general purpose financial statements, prescribes guidelines for their structure, and lays out the minimum requirements for their content and disclosure.
2.2 Objectives of Financial Statements
The objective of financial statements is to provide useful information about the financial position financial performance and cash flows of an entity that is useful in making economic decisions. The objectives of LKAS-1 are to ensure comparability of presentation of that information with the entity's financial statements of previous periods and with the financial statements of other entities. Financial statements are prepared on a going concern basis, unless management either intends to liquidate the entity or to cease trading, or has no realistic alternative but to do so.
An entity prepares its financial statements, except for cash flow information, under the
accrual basis of accounting.
Traditionally, a complete set of financial statements consist of a balance sheet, an income statement, a statement of changes in equity, a cash flow statement, and explanatory notes (including accounting policies). However, with the recent amendment to LKAS-1 some of the titles of the components of the financial statements have been changed. For instance, a balance sheet may now be referred to as a statement of financial position. Furthermore, the revised LKAS- 1 has also introduced a new statement, the statement of comprehensive income.
2.3 Complete Set of Financial Statements
The components of a complete set of financial statements are
A statement of financial position at the end of the...