FINANCIAL

STATEMENT FOR
PUBLICATION
Introduction
• MFRS 101 prescribes the basis for the presentation of
general-purpose financial statement in order to
ensure comparability with both the entity’s own
financial statements of previous periods and with the
financial statements of other entities
• To achieve this objective,

• MFRS 101 – sets out

– Overall requirements for the
presentation of financial statement
– Guideline for their structure
– Minimum requirements for their
contents
Components of financial statement
• Statement of financial position
• Statement of profit or loss and other comprehensive
income
• Statement of changes in equity
• Statement of cash flow
• Notes – comprising a summary of significant policies
and other explanatory information
• Comparative information in respect of the preceding
period
Companies Act 2019
• Non par value regime-the concept of authorized share capital
would be abolished.
• A company is required to notify its issued share capital and
paid up capital.
• Share premium account and capital redemption reserve would
be abolished and the amounts standing in credit in the share
premium account and capital redemption reserve shall become
part of the share capital
• The term ‘dividend’ is now used
• interchangeably with the term ‘distribution’
Companies Act 2016
• The directors are required to sign a solvency
• statement when a company carries out the
• following transactions:
• (i) redemption of preference shares out of capital;
• (ii) capital reduction by way of a solvency statement;
• (iii) financial assistance; and
• (iv) share buyback.
Companies Act 2016
• A company may now only make a distribution to the
shareholders out of the profits of the company
available if the company is solvent.
 Fair presentation and compliance
with MFRSs
• MFRS 101 – requires financial statement should present fairly
the financial position, financial performance and cash flows of
an entity
• Fair presentation requires the faithful representation of the
• Effects of transactions, other events and conditions in accordance with the
definition, recognition and measurement criteria for assets, liabilities,
income and expenses as set out in the framework
Underlying Principles
• In presenting the financial statement, the following
underlying principles are to be followed:
1. Going concern
2. Accrual basis of accounting
3. Materiality and aggregation
4. Offsetting
1. Going concern
• Financial statement are to be prepared on a going
concern basis unless management either intends to
liquidate the entity
• This assumption is important with respect to the
values adopted for assets in the financial statements
and adoption of the historical cost basis
• If the financial statements are not prepared on the
going concern basis, management has to disclose that
fact
2. Accruals basis of accounting
• Under the accruals principle, asset, liability, equity,
income and expense are recognised if they meet the
definition and recognition criteria
• Eg : revenue is recognised in profit or loss when it is
earned and not when cash is received. Expenses are
recognised when they are incurred and not when
they are paid
 3. Materiality and aggregation
• Materiality is concerned with whether an omission or a
misstatement can influence the economic decisions of users of
fin. Stmt
• An item is considered material if it is capable of making a difference in
the economic decision made by user

• MFRS 101 - Each class of material items and dissimilar items

should be presented separately and those that are immaterial
may be aggregated with amounts of similar items
• Eg 20 chairs acquired can be aggregated as one set of furniture
4. Offsetting
• Assets and liabilities are not to be offset,
• Eg cash at bank cannot be offset against overdraft

• Income and expenses are not offset

• Turnover and cost of sales should be shown separately
• Where the gain or loss from a transaction is not material, then
the revenue and expenditure may be offset
• Eg disposal of NCA – the gain or loss on disposal is
shown as a single item (difference between the proceeds
and the carrying value of the asset)
Reporting period
• Entities are required to present a complete set of
financial statements, including comparative financial
statement, at least annually
• The reporting period generally covers 12 months but
if the period is longer or shorter, the entity must
disclose the following
• The reason for using a longer or shorter period
• The fact that the information disclosed may not be entirely
comparative
Comparative information
• Comparative information both narrative and
descriptive, is to be disclosed to allow the assessment
of trends in financial information for predictive
purpose
• An entity will present two sets of financial statement