Tag Archives | Financial Statements

Why do we Need to Prepare Financial Statements?

Get the answer of: Why do we Need to Prepare Financial Statements? Financial Reporting Standards: Having discussed various stakeholders group of an entity, let us now turn to financial reporting system which facilitates the preparation and presentation of general purpose financial statements. International Financial Reporting Standards (IFRSs) have recently emerged as global financial reporting standards […]

Top 5 Elements of Financial Statements | Accounting

This article throws light upon the top five elements of financial statements. They are: 1. Assets 2. Liabilities 3. Equity 4. Income 5. Expense. Element # 1. Assets: Features of an asset: i. The future economic benefit embodied in an asset is the potential to contribute, directly or indirectly, to the flow of cash and […]

Various Components of Reserves and Surplus | Accounting

Various components of reserves and surplus are: (i) Capital reserve which represents unrealised revaluation profit on property, plant and equipment and intangible assets. This also termed as Revaluation Reserve. (ii) Debenture Redemption reserve which represents profit set aside for re­demption of debentures. (iii) Capital redemption reserve which represents utilised reserve for redemp­tion of preference share […]

Format of Income Statement | Accounting

After reading this article you will learn about the format of income statement. Introduction to Income Statement: An important component of financial statements of an entity is Statement of Comprehensive Income. The main purpose of this statement is performance measurement. For a business entity performance is measured in terms of profit. There are different concepts […]

Format of Balance Sheet | Accounting

After reading this article you will learn about the format of balance sheet. Balance sheet reflects financial position of an entity. IAS 1 has used the term Statement of Financial Position in place of Balance Sheet. IFRSs format focuses on classified balance sheet based on current non-current classification. Balance sheet presents assets, liabilities and equity […]

Preparation of Financial Statements

After reading this article you will learn about the preparation of financial statements. Financial Statements: As per IFRSs financial statements comprise of Statement of Comprehensive Income, Statement of Financial Position, Statement of Changes in Equity, Statement of Cash Flows and related notes to accounts. Statement of Compre­hensive Income has two sub-components – Statement of Income […]

Financial Statements of a Business Enterprise

The financial statements are: 1. Profits and Loss Account 2. Balance Sheet 3. Statement of Changes in Financial Position (SCFP). Financial Statement # 1. Profits and Loss Account: Profit and loss account, also known as income Statement, presents the results of operations of a business enterprise for a period of time. This statement shows net […]

How to Prepare Funds Flow Statement?

The below mentioned article will guide you about how to prepare funds flow statement. In order to prepare funds flow statement, on total resources basis, successive balance sheet are compared and changes in each balance sheet item is recorded and further designated as a source of funds or a use of funds. The comparison of […]

Cash Flow Statement: Concept, Classification and Significance

In this article we will discuss about Cash Flow Statement:- 1. Concept of Cash Flow Statement 2. Classification of Cash Flow Statement 3. Presentation 4. Significance 5. Limitations. Concept of Cash Flow Statement: A Cash flow statement discloses net increase (or decrease) in cash during an accounting period. As per AS-3 (Revised) the objective of […]

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