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Lecture notes2 introduction to accounting, Kew watson financial accounting
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The document contain fully explained written notes to the financial statements
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Study notes for financial accounting, ISBN 9780195988352
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Lecture notes Introduction to accountancy (CACC012) Financial Accounting, ISBN: 9780195988352
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UNIVERSITY OF LIMPOPOTURFLOOP CAMPUS
SCHOOL OF ACCOUNTANCY
CACC012
2ND SEMESTER 2020
WORKBOOK:2(b)
MODULE 2
FINANCIAL STATEMENTS -
COMPANIES
(IAS 1)
(Explanations to Content, Structure & format)
Pages 1- 9
Prepared by: Ms A Brandt - (Revised: July 2016)
Revised by: Mr G Nyirenda (October 2020)
ACCOUNTANCY DREAM @ UL
Copyright Reserved - A Brandt Page 1
, FINANCIAL STATEMENTS: FRAMEWORK FOR PRESENTATION AND DISCLOSURE
The framework for the presentation and disclosure in respect of financial statements are prepared
with reference to IFRS (adapted for the course) and is applicable to private and public companies.
These statements are also known as separate financial statements (IAS 27). A company that has
investments in subsidiary companies has to prepare consolidated financial statements as well as
separate financial statements. Consolidated financial statements are a sophisticated merging of the
separate financial statements of the companies in the group. (Further level of accounting).
STRUCTURE AND CONTENT (dealing with the format and content of the F/S.)
Identification of financial statements
The financial statements shall be identified clearly and distinguished from other information in the
same published document.
Each component of the financial statements shall be identified clearly. In addition, the following
information shall be displayed prominently, and repeated when it is necessary for a proper
understanding of the information presented:
- the name of the reporting entity or other means of identification, and any change in that
information from the preceding reporting period;
- whether the financial statements cover the individual entity or group of companies;
- the end of the reporting period or the period covered by the financial statements or
notes;
- the presentation currency, as defined in IAS 21 - The effects of changes in foreign
exchange rates; and
- the level of rounding used in presenting amounts in the financial statements.
Other disclosure (IAS 1 - par 138)
An entity shall disclose the following, if not disclosed elsewhere in information published with the
financial statements:
- the domicile and legal form of the entity, its country of incorporation and the address of
its registered office (or principal place of business, if different from the registered office;
- a description of the nature of the entity’s operations and its principal activities; and
- the name of the parent entity and the ultimate holding entity of the group.
Notes to the financial statements
Notes contain information in addition to that presented in the statement of financial position, the
statement of profit or loss, the statement of changes in equity and the statement of cash flows.
Notes provide narrative descriptions on disaggregation of items presented in those statements.
The notes shall:
- present information about the basis of preparation of the financial statements and the
specific accounting policies,
- disclose the information required by IFRS’s that is not presented on other places in the
financial statements; and
- provide additional information that is not presented elsewhere in the financial
statements, but is relevant to an understanding of any of them
An entity shall as far as is practicable, present notes in a systematic manner. An entity shall cross
reference each item in the statements of financial position, profit or loss and also in the statement of
changes in equity and the statement of cash flows, to any related information in the notes.
(In answering questions calculations should be cross referenced to items in the financial statements.
Please note that calculations do NOT FORM PART OF the financial statements and can NOT be used
to
replace the notes to the financial statements.)
Copyright Reserved - A Brandt Page 2
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