PAS 1: Presentation of Financial Statement
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Financial statements are the product or
output of the financial accounting
process; used to communicate in fin
acctg users.
General purpose financial statements are
directed to all common users and not to
specific users.
Components of Financial Statements
1. Statement of financial position
2. Income statement
3. Statement of comprehensive income
4. Statement of changes in equity
5. Statements of cash flows
6. Explanatory notes
Objectives of Financial Statements
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Provide information that is useful to a
wide range of users in making economic
decisions. Provide information of the ff:
Assets, liabilities, equity, income and
expenses, contributions, cash flows
Frequency of Reporting – Financial Statements
shall be presented at least annually.
Statement of Financial Position –
compromises: assets, liabilities, equity.
PAS 7: Statement of Cash Flows
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summarizing the operating, investing and
financing activities of an entity. Provides
information about cash receipts and cash
payments.
Cash equivalents – three months or less
before the date of maturity.
Inflows and Outflows
Operating Activities – entity's principal revenueproducing activities. It affects the determination
of net income or loss. Cash payments and
receipts from acquired goods etc.
Investing Activities – acquisition and disposal
of long-term assets and other investments. Cash
payments to acquire property
Financing Activities – cash flows derived from
equity capital and borrowings of the entity.
PAS 10: Events after the reporting period –
those events, whether favorable or unfavorable,
that occur between the end of the reporting
period and the date on which the financial
statements are authorized for issue.
PAS 24: Related party disclosures – related if
one party has:
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Ability to control the other party
Ability to exercise has a considerable
influence over the other party
Joint control over the reporting entity
PAS 8: Accounting Policies, Estimates and
Errors – the specific principles, bases,
conventions, rules, and practices applied by an
entity in preparing and presenting financial
statements.
Prior period errors – omissions and
misstatements in the financial statements for
one or more periods.
PAS 2: Inventories – assets held for sale in the
ordinary course of business
Cost Formulas: First in First out (FIFO),
Weighted Average
Measurement of Inventory – LCNRV (Total
Cost-LCNRV = Inventory write down)
PAS 16: PPE – tangible assets held for use in the
production or supply of goods. Expected to be
used for more than one period.
Measurement of PPE: at COST.
PAS 20: Government Grant – assistance by the
government in the form of a transfer of resources
to an entity.
PAS 23: Borrowing cost – interest and other
costs that an entity incurs in connection with the
borrowing of funds.
PAS 28: Investment in Associate – accounting
treatment for investments in associates and
joint ventures.
PAS 36: Impairment of Assets – guidelines to
ensure that assets are not recorded at more than
their recoverable amount. Asset is deemed
impaired if its carrying value exceeds the amount
that can be recovered thru either use or sale.
PAS 38: Intangible assets – non-monetary,
identifiable asset that lacks physical substance
but holds significant value for a business entity.
PAS 40: Investments Property: property(land or
bldg) held by an owner or by the lessee under a
finance lease to earn rentals for capital
appreciaton.
PAS 41: Agriculture – biological assets are living
animals and plants.
PAS 37: Provision, Contingent Liability, and
asset
Provision – existing liability of uncertain timing
or uncertain amount. Probable and
measurable.
Contingent Liability – an obligation that arises
from past events and whose existence will be
confirmed only by the occurrence or nonoccurrence of an uncertain future event. Either
probable or measurable, but not both.
Contingent Asset – same with liab.
PAS 32: Financial Instruments – Presentation
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Any contract that results in financial
asset for one entity while simultaneously
creating a financial liability or an equity
instrument for another equity
PAS 12: Income Taxes
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Accounting income/ financial income
represents a company’s net income
before deducting income tas expense
Taxable income refers to the income for a
given period that is determined in
accordance with tax laws and serves as
the basis for computing income tax
payable or recoverable.
PAS 19: Employee Benefits – guidelines for
recognizing, measuring, and disclosing
employee benefits in an employer’s financial
statements.
PAS 33: Earnings per share – the amount
attributable to every ordinary share outstanding
during the period.
PAS 34: Interim Financial Reporting –
preparation and presentation of financial
statements for a period shorter than a full fiscal
year.
File quarterly interim reports within 45 days
after the end of each of the first three
quarters.
PAS 29: Reporting in Hyperinflationary
Economy – extremely rapid and uncontrollable
increase in prices, typically exceeding 50% per
month.
PFRS 6: Exploration and evaluation of mineral
resources – the search for mineral resources
after the entity has obtained the legal right to
explore in a specific area, as well as the
determination of the technical feasibility and
commercial viability of extracting the mineral
resources.
PAS 8: Operating segments
Reporting – an entity shall disclose information
to enable users of financial statements to
evaluate the nature and financial effects of the
business activities.
Segment Reporting – is the disclosure of certain
financial information about the products and
services an entity produces and the
geographical areas in which an entity operates.
PFRS 9: Financial Instruments – at initial
recognition, an entity shall measure a financial
asset at FMV. Transaction costs directly
attributable to transactions shall be capitalized.