Transcript Prologue to Financial Statement Analysis

ACCA P2 (HKG)
Corporate Reporting
HKAS 1 Presentation of
Financial Statements
(revised 2007)
17 Oct 2008
Dr. Gary Leung
www.garyleung.hk
Introduction
 Phase A in presentation project
 Limited impact
 Effective: annual periods beginning on
or after 1 Jan 2009
 Notes- only include the changes in
format of financial statements
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Key changes
 Titles of financial statements
– “Balance Sheet” will become “Statement of financial
position”
– “Income statement” will become “ Statement of
comprehensive income”
– “Cash flow statement” will be come “Statement of cash
flows”
– “Statement of changes in equity remains unchanged.
 Disclose income tax relating to each component of other
comprehensive income.
 Disclose reclassification adjustments relating to components
of other comprehensive income.
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Financial Statements
 A complete set of financial statements
includes
– Statement of financial position
– Statement of comprehensive income, this will
include;
• Profit or loss for the period, and
• Other comprehensive income recognised in the
period.
– A statement of changes in equity
– Statement of cash flows
– Accounting policies and explanatory notes.
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Statement of Financial Position
 Present a statement of financial position
(balance sheet) as at the beginning of the
earliest comparative period in a complete
set of financial statements when the entity
applies an accounting policy
retrospectively or makes a retrospective
restatement. (i.e. 3 years’ balance sheet)
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Statement of Comprehensive
Income
 All items of income and expense recognised
in a period must be presented either:
– in a single statement of comprehensive income;
or
– in two statements:
• a statement displaying components of profit or loss
(separate income statement); and
• a second statement beginning with profit or loss and
displaying components of other comprehensive
income.
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Statement of Comprehensive
Income
 Comprehensive income for a period includes profit or
loss for that period plus other comprehensive income
recognised in that period. The components of other
comprehensive income include:
– Changes in revaluation surplus (HKAS 16 & HKAS 38)
– Actuarial gains and losses on defined benefit plans
recognised in accordance with paragraph 93A of HKAS 19
– Gains and losses arising from translating the financial
statements of a foreign operation or from functional to
presentation currency (HKAS 21)
– Gains and losses on remeasuring available-for-sale
financial assets (HKAS 39)
– The effective portion of gains and losses on hedging
instruments in cash flow hedge (HKAS 39)
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Other comprehensive income
 Components of other comprehensive
income may be presented either:
– net of related tax effects; or
– before related tax effects with one amount
shown for the aggregate amount of related tax
effects.
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Statement of Changes in Equity
 An entity should present as a separate component of its
financial statements, a statement showing:
– total comprehensive income for the period, showing
separately the total amounts attributable to owners of
the parent and to minority interest;;
– for each component of equity, the effects of
retrospective application or retrospective restatement
(per HKAS 8);
– the amounts of transactions with owners in their
capacity as owners, showing separately contributions
and distributions; and
– for each component of equity, a reconciliation
between the carrying amount at the beginning and the
end of the period, disclosing each change separately.
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