Professional Documents
Culture Documents
CHAPTER 7 PUBLISHED FINANCIAL STATEMENTS International influences Impact of the European Union Fourth Directi e Internationa! Financia! Reportin" Stan#ar#$ Con er"ence in Europe
Statement of Principles Primar% financia! $tatement$ Note$ to financia! $tatement$ Accompan%in" information &ther mean$ of financia! reportin" &ther information Contents of annual report Primar% financia! $tatement$ Ba!ance $heet Profit an# !o$$ account Statement of tota! reco"ni$e# "ain$ an# !o$$e$ Ca$h f!o' $tatement
Financial and Management Accounting, Third Edition P +eetman an# P ,or#on) Cop%ri"ht - Pear$on E#ucation Limite# .//0
Accompan%in" information &peratin" an# financia! re ie' Chairman1$ $tatement Director$1 report Non2financia! information
Formats Ba!ance $heet an# Profit an# !o$$ account Format$ (a$e# on Fourth Directi e an# inc!u#e# in Companie$ Act *345) 6See format$ in Chapter 77 Safe an# Sure i!!u$tration 8 compare 'ith format$9 $ee that or#er of item$ i$ con$i$tent (ut $u(tota!$ are at the #i$cretion of the preparer) Ca$h f!o' $tatement Format in#icate# in FRS * 6re i$e#79 *33: Safe an# Sure i!!u$tration9 note the main hea#in"$ ta;en from FRS * Reconci!in" profit an# ca$h f!o' Notes to the financial statements Re<uire# (% Companie$ Act *345 an# accountin" $tan#ar#$ Accompan%in" information &peratin" an# Financia! Re ie' Chairman1$ Statement Director$1 report Hi$torica! $ummarie$
Financial and Management Accounting, Third Edition P +eetman an# P ,or#on) Cop%ri"ht - Pear$on E#ucation Limite# .//0
Beyond the annual report What do you want to know about a company? +hat #ri e$ ca$h f!o' an# profit= >ua!it% of mana"ement= For'ar#2!oo;in" information=
Where do you find information about a company? &ne2to2one meetin"$ 'ith #irector$ Compan% (riefin"$ to ana!%$t$ Bro;er$1 report$ Pre$$ re!ea$e$ Letter$ to $hareho!#er$ Pre!iminar% announcement of re$u!t$ Ha!f2%ear!% 6interim7 report$ Chairman1$ $tatement in annua! report Financia! $tatement$ in annua! report
Financial and Management Accounting, Third Edition P +eetman an# P ,or#on) Cop%ri"ht - Pear$on E#ucation Limite# .//0
Balance sheet structure ASSETS Intan"i(!e fi?e# a$$et$ Tan"i(!e fi?e# a$$et$ Current a$$et$
LIABILITIES Lia(i!itie$ #ue in !e$$ than one %ear Lia(i!itie$ #ue in more than one %ear
Financial and Management Accounting, Third Edition P +eetman an# P ,or#on) Cop%ri"ht - Pear$on E#ucation Limite# .//0
Profit and loss account Turno er Co$t of $a!e$ ,ro$$ profit Profit (efore ta?ation Profit after ta?ation
Group accounting Define "roup The importance of contro! The parent compan%1$ (a!ance $heet Ac<ui$ition or mer"er=
Group financial statements Ac<uirin" a $u($i#iar% for ca$h Assets Lia(i!itie$ A &'ner$hip intere$t
Ac<uirin" a $u($i#iar% (% e?chan"e of $hare$ For a $hare e?chan"e9 the effect on the parent compan%1$ (a!ance $heet i$ to increa$e the a$$et$ an# increa$e the o'ner$hip intere$t) In term$ of the accountin" e<uationB Assets Lia(i!itie$ A Ownership interest
Financial and Management Accounting, Third Edition P +eetman an# P ,or#on) Cop%ri"ht - Pear$on E#ucation Limite# .//0
The con$o!i#ate# (a!ance $heet 6*7B Co$t of In e$tment in S e<ua!$ Net a$$et$ of S Sta"e * Net assets of plc Net assets of ! plc A$$et$ minu$ !ia(i!itie$ of S
&ther a$$et$ minu$ !ia(i!itie$ of P Sta"e . "a# $ringing together all assets and liabilities A$$et$ minu$ !ia(i!itie$ of S &ther a$$et$ minu$ !ia(i!itie$ of P e<ua!$ "b# %roup&s consolidated balance sheet Fi?e# a$$et$ of P C S p!u$ Current a$$et$ of P C S minu$ Current !ia(i!itie$ of P C S minu$ Lon"2term !ia(i!itie$ of P C S e<ua!$
rearran"e#
The con$o!i#ate# (a!ance $heet 6.7B Co$t of in e$tment in S i$ "reater than Net a$$et$ of S Sta"e * Net assets of plc Net assets of ! plc A$$et$ minu$ !ia(i!itie$ of S
The con$o!i#ate# (a!ance $heet 6.7 6cont)7B Sta"e . ,roup net a$$et$ of the P "roup %roup net assets A$$et$ Minu$ Lia(i!itie$ of S
Difference on con$o!i#ation i$ ca!!e# DDDDDDDDDD)) It i$ $ho'n in the ,roup (a!ance $heet 'ith the Intan"i(!e Fi?e# a$$et$ at the $tart of the (a!ance $heet) Ne"ati e #ifference on con$o!i#ation i$ ca!!e# DDDDDDDDDDDDDD) Amorti$ation of "oo#'i!! ari$in" on ac<ui$ition Assets Lia(i!itie$ A Ownership interest
Financial and Management Accounting, Third Edition P +eetman an# P ,or#on) Cop%ri"ht - Pear$on E#ucation Limite# .//0