PRESENTATION OF

FINANCIAL STATEMENT

2013 The McGraw-Hill Companies, Inc.

Outline
PRESENTATION OF FINANCIAL STATEMENT
Annual report

Components of Financial Statements

Statement of financial position

Statement of comprehensive income
Statement of changes in equity
Statement of cash flows
Notes to the financial statements

Interim report
o Objective of interim financial reporting
o Components of an interim report

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A Complete Set of Financial Statements

Financial Statements

Statement of
Financial
Position

Statements of
Comprehensive
Income

Statement of
Changes in
Equity

Statement of
Cash Flows

Notes to the
Financial
Statements

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Statement of Financial Position

Purpose: enables users to assess the financial health of an

entity by looking at the state of its assets and compare
them with its liabilities
Minimum information: MFRS 101.54

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STATEMENT OF FINANCIAL POSITION

(continued)
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STATEMENT OF FINANCIAL POSITION

(continued)

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STATEMENT OF FINANCIAL POSITION

(concluded)

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Statement of Comprehensive Income

The sections in the statement:

(a) profit or loss;
(b) total other comprehensive income; and
(c) comprehensive income for the period (the total of profit
or loss and other comprehensive income) [MFRS101.81A].

Purpose: to provide users with the basis for measuring

performance of an entitys performance over a financial
accounting period.

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Statement of Profit or Loss

Required line items:

(a) revenue;
(b) finance costs;
(c) share of the profit or loss of associates and joint ventures
accounted for using the equity method;
(d) tax expense; (and)
(e) a single amount for the total of discontinued operations
[MFRS101.82].

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Other Comprehensive Income Section

Any excess from changes in value in its assets and/or liabilities.

Includes [MFRS101.7]:
(a) changes in revaluation surplus;
(b) actuarial gains and losses on defined benefit plans;
(c) gains and losses arising from translating the financial
statements of a foreign operation;
(d) gains and losses on remeasuring available-for-sale financial
assets;
(e) the effective portion of gains and losses on hedging
instruments in a cash flow hedge.

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STATEMENT OF COMPREHENSIVE INCOME

(continued)

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STATEMENT OF COMPREHENSIVE INCOME

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Statement of Changes in Equity

It shows the factors that cause a change in the owners equity

over one accounting period.
The changes in the equity between the opening balance and
closing balance within an accounting period, reflect the
increase or decrease in the entitys net assets.
The overall change represents the total amount of income and
expense, including gains and losses, generated by the activities
in the entity.
The changes resulting from transactions with owners in their
capacity as owners cannot be identified by the change from
opening balance to closing balance, which thus necessitates the
statement of changes in equity.

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Statement of Changes in Equity

Minimum information required:
(a) total comprehensive income for the period;
(b) the effects of retrospective application or retrospective
restatement; and
(c) a reconciliation between the carrying amount at the beginning and
the end of the period, separately disclosing changes resulting from:
(i) profit or loss;
(ii) other comprehensive income; and
(iii) transactions with owners in their capacity as owners showing
separately contributions by and distributions to owners, and
changes in ownership interests in subsidiaries that do not
result in a loss of control [MFRS101.106]

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STATEMENT OF CHANGES IN EQUITY

(continued)

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STATEMENT OF CHANGES IN EQUITY

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Statement of Cash Flows

Purpose:
provides the basis for users to assess the ability of an entity
to generate cash and cash equivalents and the needs of the
entity to utilize them.
provides information about the historical changes in cash
and cash equivalents of the entity that classifies cash flow
during the period as from operating, investing and
financing activities.
gives ideas to users about the entitys liquidity and solvency.

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Statement of Cash Flows

Reporting cash flows from operating activities
To

present information on cash flows either by using:

(a) the direct method, whereby major classes of gross cash
receipts and gross cash payments are disclosed; or
(b) the indirect method, whereby profit or loss is adjusted
for the effects of transactions of a non-cash nature, any
deferrals or accruals of past or future operating cash
receipts or payments, and items of income or expense
associated with investing or financing cash flows.

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STATEMENT OF CASH FLOW

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Notes to the Financial

Statements

Interim Reports

Statements showing financial position and operating

results for intervals of less than a year are referred
to as interim financial statements.
Under the integral part of annual period
concept, the same general accounting principles
and reporting practices employed for annual
reports are to be utilized for interim statements,
but modifications may be required so the interim
results will better relate to the total results of
operations for the annual period.
(continued)
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Interim Reporting
Issued for periods of less than
a year, typically as quarterly
financial statements.
Serves to enhance the
timeliness of financial
information.
Fundamental debate centers
on the choice between the
discrete and integral part
approaches.
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Interim Reporting
Reporting Revenues
and Expenses

IAS No. 14 requires companies to

apply the same accounting policies
in its interim financial statements as
its annual financial statements

Reporting Unusual
Items

Major events such as discontinued

operations are reported entirely
within the interim period in which
they occur.

Earnings Per Share

Quarterly EPS calculations follow

the same procedures as annual
calculations.

Reporting Accounting
Changes

Accounting changes made in an

interim period are reported by
retrospectively applying the changes
to prior financial statements.
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Interim Reporting

Disclosures
Recognition and reversal of impairment loss and write-downs.
Purchase and disposal of property, plant, and equipment.
Litigation settlements.
Changes in accounting policies, accounting estimates, and
correction of errors.
Related party transactions.
Changes in the classification of financial assets.
Changes in contingent liabilities or contingent assets.
Seasonal revenues, costs, and expenses.
Issuance of debt and equity securities.
Dividends paid.
Changes in corporate structure such as business
combinations, gain or loss of control of investments,
restructurings, and discontinued operations.
Unusual or infrequent items.
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Summary

For presentation of financial statements, we should

refer to MFRS 101 Presentation of Financial Statements
and MFRS 107 Statement of Cash Flows as well as
other standards for specific items that require special
disclosures.
A complete set of financial statements consist of
Statement of Financial Position, Statement of Profit or
Loss and Other Comprehensive Income, Statement
of Changes in Equity, Statement of Cash Flows and
notes to the accounts.

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Summary

When preparing financial statements, we should

always remember to serve the specific objective of
these statements, that is to provide information about
financial position, financial performance and cash
flows of the entity that is useful to a wide range of
users in making economic decisions.
There are items that must be presented on the face
of these statements and items that are allowed to be
presented either in these statements, another
statement or in notes.

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END OF LECTURE

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