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Components of Financial Statements
03-15-2010, 04:40 PM,
Components of Financial Statements
Dear All,

My friends asked me about components of Financial Statements. In my view, components of Financial Statements are as follows;

Income Statement
Balance Sheet
Cash Flow
Changes in Equity
Notes to Financial Statements

Please share your ideas regarding the topic.

Zia ur Rahman
03-15-2010, 06:11 PM,


I think you have skipped the revision in IAS-1 that has made two changes in this regard. Revised IAS-1 (paragraph 10) states that a complete set of financial statements comprises

“(a) a statement of financial position as at the end of the period;

(b) a statement of comprehensive income for the period;

© a statement of changes in equity for the period;

(d) a statement of cash flows for the period;

(e) notes, comprising a summary of significant accounting policies and other explanatory information; and

(f) a statement of financial position as at the beginning of the earliest comparative period when an entity applies an accounting policy retrospectively or makes a retrospective restatement of items in its financial statements, or when it reclassifies items in its financial statements.

An entity may use titles for the statements other than those used in this Standard.”

The component specified at (b) above can either be one Statement of Comprehensive Income (one statement approach) of one “Income Statement” and one “Statement of Other Comprehensive Income” (two statement approach). For detailed insight please see paragraph 81 that states

“An entity shall present all items of income and expense recognized in a period

(a) in a single statement of comprehensive income, or

(b) 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 (statement of comprehensive income). “

To understand the above, either you can download illustrative financial statements from the webpages of international firms or obtain a latest copy of annual report of ICI Limited for the year ended 31 December 2009.


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