Financial statement comprise of:
-
Statement of Financial Position
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Statement of Comprehensive Income OR Income Statement with Other Comprehensive
Income (OCI)
-
Statement of
Changes in Equity
-
Statement of Cash Flow (this will be in another blog)
-
Accounting policies and explanatory notes
Below is a simplified format of a Statement of Financial Position:
EDG Statement of Financial
Position as at 31 December 2012
Assets
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Current assets:
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Cash
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$x
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Receivables
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x
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Inventory
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x
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Prepaid Insurance
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x
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Non-current assets:
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Property and Equipment
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x
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Total Assets
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$x
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Liabilities and Equity
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Current liabilities:
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Payables
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$x
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Other Liabilities
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x
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Short-term loans
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x
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Non-current liabilities:
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Long-term loans
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x
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Total Liabilities
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$x
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Equity:
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Share Capital
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x
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Retained Earnings
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x
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Total Equity
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$x
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Total Liabilities and Equity
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$x
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An asset or liability to be classified as current if:
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It will be settled within 12 months of December 31, 2012; OR
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It is part of the entity’s normal operating
cycle
Statement of Changes in Equity
-
Provides a summary of all changes in equity
arising from transactions with owners of the business. This will include the effect of Dividends and
Issuance of shares; and
-
Profit for the period
Below is a simplified format of a Statement of Changes
Equity:
EDG Statement of Changes in
Equity for the year ended 31 December 2012
Share
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Retained
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Total
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Capital
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Earnings
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Equity
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Balance at 31 December 2012
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$x
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$x
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$x
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Dividends
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(x)
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(x)
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Issue of Share Capital
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x
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x
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Profit for the period
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x
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x
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Balance at 31 December 2012
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$x
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$x
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$x
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Statement of Comprehensive Income
-
Total Comprehensive Income is the profit or loss
for the period PLUS Other Comprehensive Income
-
Other Comprehensive Income is income and
expenses that are not part of normal profit and loss. Example is Gain or loss on revaluation of
property and equipment - some businesses hire an expert for independent
valuation of their property and equipment.
Below is a simplified format of a Statement of Comprehensive
Income:
EDG Statement of Comprehensive
Income for the year ended 31 December 2012
Revenue
|
$x
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Cost of Sales
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(x)
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Gross Profit
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x
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General and
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x
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Administrative Expense
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x
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Profit from Operations
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x
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Finance Cost
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(x)
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Profit before tax
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x
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Income tax expense
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(x)
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Profit for the period
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x
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Other comprehensive income
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Gain/loss on revaluation
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x
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Total comprehensive income for the
year
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$x
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