Conceptual Framework and Accounting Standards 1

Financial Statements
Conceptual Framework and Accounting Standards 1

Learning objectives
-Definition of Financial Statements
-Components of Financial Statements
Conceptual Framework and Accounting Standards 1

Financial Statements
- written summary reports showing information about
the financial position, performance, changes in equity
and cash flows of the business
- the end-product or main output of the accounting
process
- Financial statements are interrelated to each other
Conceptual Framework and Accounting Standards 1

Complete Set of Financial Statements

1. Statement of Financial Position (Balance Sheet)
2. Statement of Profit or Loss (Income Statement)
3. Statement of Comprehensive Income
(includes profit or loss section and other comprehensive income items)
4. Statement of Changes in Equity
5. Statement of Cash Flows
6. Notes to Financial Statements
(comprising of significant accounting policies and other notes)
Conceptual Framework and Accounting Standards 1

Comprehensive Income - change in equity during a period

resulting from transaction and other events, other than changes
resulting from transactions with owners in their capacity as owners
Profit - total of income less expenses excluding the components of
other comprehensive income

Other comprehensive income (OCI) – income and

expense items that are not recognized in profit or loss as required or
permitted by PFRS