Financial Statements
Notes to the financial statements

Set out in International Acc. Standards
(IAS1/AC 101)

Purpose of Fin. Statements: provide
information to common users, eg. Owners &
creditors

Purpose of Standards: Ensure that fin.
statements are comparable with previous periods
and similar entities
Notes to the financial
statements
Description of bases of measurement and
valuation
 Description of accounting policy of entity
 Details of amounts disclosed on face of financial
statements
 Additional information required by IFRS

Accounting policies
Accounting policy:
◦ principles
◦ bases of measurements
◦ practices
 Includes following:
◦ description of measurement bases used
when valuing assets
◦ recognition of depreciation
◦ recognition of income
◦ provisions

Notes to financial statements
2. Property, plant and equipment
200Y
R
R
Land and
Computer
buildings
Equipment
Carrying amount – beginning of year:
R
R
Furniture
Total
-
-
-
-
Cost price
-
-
-
-
Accumulated depreciation
-
-
-
-
50 000
9 375
24 000
83 375
50 000
10 000
30 000
90 000
-
(625)
(6 000)
(6 625)
50 000
9 375
24 000
83 375
50 000
10 000
30 000
90 000
-
(625)
(6 000)
(6 625)
Movements during the year:
Additions
Depreciation
Carrying amount – end of year:
Cost price
Accumulated depreciation
Land and buildings, purchased on 1 March 200X, comprise erf 2226 in Knysna.
CHERRY BLOSSOM
NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDING 28 FEBRUARY 200Y
200Y
R
3.
Inventory
Consumables
4.
800
Trade and other debtors
Trade debtors (3 750 - 50)
3 700
Less Allowance: Doubtful debts
(111)
3 589
5.
Cash and cash equivalents
Bank
6.
Trade and other creditors
Trade creditors
7.
27 900
Domicile and legal form
Cherry Blossom is a sole proprietor, trading as a service entity in Knysna stand 2226.
2 885
CHERRY BLOSSOM
STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDING 28 FEBRUARY 200Y
200Y
Notes
R
22 285
Services rendered
Income:
2 930
Rent received
2 900
30
Discount received
Operating expenses:
(35 136)
Water and electricity
1 730
Telephone
1 190
13 500
Salaries and wages
10
Discount allowed
650
Stationery
11 270
Consumables (12 200 - 800 - 130)
161
Doubtful debts (50 + 111)
Depreciation ((30 000 x 20%) + (10 000 x 25% x 3/12))
Profit before interest and finance costs
Interest received
Net loss for the period
2
6 625
(9 921)
100
(9 821)
CHERRY BLOSSOM
STATEMENT OF CHANGES IN EQUITY
FOR THE YEAR ENDING 28 FEBRUARY 200Y
200Y
R
Balance at beginning of period
113 730
Additional contribution
10 000
Less: Net loss for the period
(9 821)
Less: Drawings (1 000 + 130)
(1 130)
Balance at end of period
112 779
CHERRY BLOSSOM
STATEMENT OF FINANCIAL POSITION
ON 28 FEBRUARY 200Y
200Y
Notes
R
ASSETS
Non-current assets:
Property, plant and equipment
2
Current assets:
83 375
32 289
Consumables
3
800
Trade and other debtors
4
3 589
Bank
5
27 900
TOTAL ASSETS
115 664
EQUITY AND LIABILITIES
Equity:
Capital
112 779
Current liabilities:
Trade and other creditors
TOTAL EQUITY AND LIABILITIES
6
2 885
115 664