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Lecture 1A - Statement of Financial Position

Based on the information provided, the total current assets of ABC Co. as of December 21, 20x1 is P90,000. Current assets include cash, trade receivables, held for trading securities, financial assets at FVPL and prepaid assets. The other assets like investments, investment property, PPE and goodwill are classified as non-current assets.

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82 views14 pages

Lecture 1A - Statement of Financial Position

Based on the information provided, the total current assets of ABC Co. as of December 21, 20x1 is P90,000. Current assets include cash, trade receivables, held for trading securities, financial assets at FVPL and prepaid assets. The other assets like investments, investment property, PPE and goodwill are classified as non-current assets.

Uploaded by

Gonzalo Jr. Ruales
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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Financial Statements

STATEMENT OF FINANCIAL POSITION


Learning Objectives

1. Enumerate and describe the components of a


complete set of financial statements.
2. Classify assets and liabilities into current and
noncurrent.
3. Prepare a statement of financial position.
Financial Statements

Financial statements are the “structured


representation of an entity’s financial position and
results of its operations.” (PAS 1.9)

General purpose financial statements


(financial statements) are “those intended to meet
the needs of users who are not in a position to
require an entity to prepare reports tailored to their
particular information needs.” (PAS 1.7)
Purpose of Financial Statements

1. Primary objective: To provide information


about the financial position, financial performance,
and cash flows of an entity that is useful to a wide
range of users in making economic decisions.

2. Secondary objective: To show the results of


management’s stewardship over the entity’s
resources.
Complete Set of Financial Statements

1. Statement of financial position


2. Statement of profit or loss and other
comprehensive income
3. Statement of changes in equity
4. Statement of cash flows
5. Notes to financial statements
6. Additional Statement of financial position
(required only when certain instances occur)
General Features of Financial Statements

1. Fair Presentation and Compliance with PFRS


2. Going Concern
3. Accrual Basis of Accounting
4. Materiality and Aggregation
5. Offsetting
6. Frequency of reporting
7. Comparative information
8. Consistency of presentation
Structure and Content of Financial Statements

The following information shall be displayed prominently


and repeatedly whenever relevant to the understanding of
the information presented:
a. The name of the reporting entity
b. Whether the statements are for the individual entity or
for a group of entities
c. The date of the end of the reporting period or the
period covered by the financial statements
d. The presentation currency
e. The level of rounding used (e.g., thousands, millions,
etc.)
Management’s Responsibility over Financial Statements

The management is responsible for an entity’s


financial statements. The responsibility
encompasses:
a. The preparation and fair presentation of
financial statements in accordance with PFRS
b. Internal control over financial reporting
c. Going concern assessment
d. Oversight over the financial reporting
process
e. Review and approval of financial statements
Statement of Management Responsibility

SMC_Consolidated_AFS_3years.pdf
Statement of Financial Position
Statement of Financial Position
Statement of Financial Position
Illustration: Current assets
The ledger of ABC Co. as of December 21, 20x1 includes the following:
Assets:
Cash 5,000
Trade accounts receivable
(net of P5,000 credit balance in accts.) 20,000
Held for trading securities 40,000
Financial assets designated at FVPL 15,000
Investment in equity securities at FVOCI 35,000
Investment in bonds measured at amortized cost (due in 3 yrs) 30,000
Prepaid assets 5,000
Deferred tax asset (expected to reverse in 20x2) 6,000
Investment in Associate 18,000
Investment property 23,000
Sinking fund 19,000
Property, plant and equipment 50,000
Goodwill 14,000

Required: Total current assets


Solution

Current assets
Cash 5,000
Trade A/R (20,000+5,000) 25,000
Held for trading securities 40,000
Financial assets at FVPL 15,000
Prepaid assets 5,000
Total current assets 90,000

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