Professional Documents
Culture Documents
Notes To Financial Statement
Notes To Financial Statement
6
NOTES TO FINANCIAL
STATEMENTS AND
DISCLOSURE
CONCEPT AND NATURE
The preparation of notes to financial statements
are not usually given much attention by students in
financial accounting since the greater bulk of their
time and effort are spent in solving accounting
problems.
Cash and cash equivalents. Cash and cash equivalents are carried in
the balance sheet at face value which serves as the cost. Cash and
cash equivalents comprise cash on hand, deposit held at call with
banks, and time deposits with banks that can be pre-terminated
anytime.
Illustration 6.3
The following notes support the various line items appearing
on face of the financial statements of Southern Christian College
for year 2015:
The account cash and cash equivalents consists of the following items:
2015 2014
Cash on hand 80,000 190,000
Cash in various local banks 200,000 380,000
Unrestricted short-term investments 1,200,000 500,000
1,480,000 1,070,000
Note 4 Trade and Other Receivables
2015 2014
Students – tuition
2014 – 2015 3,000,000 -
2013 – 2014 1,200,000 1,500,000
2012 – 2013 1,300,000 1,450,000
2011 – 2012 800,000 950,000
2010 – 2011 1,100,000 1,250,000
2010 and prior years 2,300,000 2,420,000
9,700,000 7,570,000
Less: Allowance for impairment loss 4,200,000 4,200,000
Net 5,500,000 3,370,000
Officers and employees 1,500,000 2,300,000
Less: Allowance for impairment loss 50,000 50,000
Net 1,450,000 2,250,000
Trade and other receivables 6,950,000 5,620,000
Note 4 Trade and Other Receivables
Note 1 Organization
a. the gain or loss arising from changes in fair value less estimated
point-of-sale costs;
b. increases due to purchases;
c. decreases attributable to sales and biological assets classified as
held for sale or included in a disposal group that is classified as
held for sale;
d. decreases due to harvests;
e. increases resulting from business combinations;
f. net exchange differences arising on the translation of financial
statements into a different presentation currency, and on the
translation of a foreign operation into the presentation of the
reporting entity; and
g. other changes. (Paragraph 50, PAS 41)
If an entity measures biological assets at their cost less any
accumulated depreciation and any accumulated impairment
losses at the end of the period, the entity shall disclose for such
biological assets:
h. the fact that an associate is not accounted for using the equity
method; and
i. summarized financial information of associates, either
individually or in groups, that are not accounted for using the
equity method, including the amounts of total assets, total
liabilities, revenues and income or loss. (Paragraph 37, PAS 28)
• depreciation;
a. for each class of asset, the net carrying amount at the balance sheet
date.
b. a reconciliation between the total of future minimum lease payments
at the balance sheet date, and their present value. In addition , an
entity shall disclose the total of future minimum lease payments at
the balance sheet date, and their present value, for each of the
following periods:
not later than one (1) year;
later than one year and not later than five (5) years;
later than five (5) years.
the present value at the balance sheet date of define benefit obligations that
are wholly unfounded;
the present value (before deducting the fair value of plan assets) at the
balance sheet date of defined benefit obligations that are wholly or partly
funded;
the fair value of any plan assets at the balance sheet date;
the net actuarial gains or losses not recognized in the balance sheet;
the past service cost not yet recognized in the balance sheet;
any amount not recognized as an asset because of the limit in
Paragraph 58(b) of PAS 19;
the fair value at the balance sheet date of any reimbursement right
recognized as an asset with a brief description of the link between the
reimbursement right and the related obligation; and
the other amounts recognized in the balance sheet.
g. the actual return on plan asset, as well as the actual return on any
reimbursement right recognized as an asset.
h. the principal actual assumptions used as at the balance sheet
including, where applicable:
a. the aggregate current and deferred tax relating to items that are
charged or credited to equity;
b. an explanation of the relationship between tax expense (income)
and accounting income in either or both of the following forms:
A numerical reconciliation between tax expense (income) and the product
of accounting income multiplied by the applicable tax rates, disclosing
also the basis on which the applicable tax rates are computed, or
A numerical reconciliation between the average effective tax rate and the
applicable tax rate, disclosing also the basis on which the applicable tax
rate is computed;
c. an explanation of changes in the applicable tax rates compared to
the previous accounting period;
d. the amount and expiry date, if any, of deductible temporary
differences, unused tax losses, and unused tax credits for which no
deferred tax assets is recognized in the balance sheet;
The following shall also be disclosed separately:
a. the parent;
b. entitles with joint control or significant influence over the entity;
c. subsidiaries;
d. associates;
e. joint ventures in which the entity is a venturer;
f. key management personnel of the entity or its parent; and
g. other related parties. (Paragraph 18, PAS 24)
IMPAIRMENT OF
ASSETS
An entity shall disclose the following for each class of assets:
f. if recoverable amount is fair value less cost to sell, the basis used
to determine fair value less costs to sell (such as whether fair
value was determined by reference to an active market).