Sme Discussion Template
Sme Discussion Template
Sme Discussion Template
Financial statements
CHAPTER 7:
SMEs – Financial Statements
SMEs – Financial Statements
Financial statements
Financial Statement
Financial statement are the means by which the information accumalated and
processed in financial accounting is periodically communicated to the users.
The financial statement are end product or main output of the financial accounting
process.
2. Compliance with PFRS for SMEs - An entity that meets the requirements of
this Framework and whose financial statements comply with this Framework,
shall make an explicit and unreserved statement of compliance with this
Framework in the notes to the financial statements.
An entity shall present separately each material class of similar items. An entity
shall present separately items of a dissimilar nature or function unless they are
immaterial.
5. Offsetting An entity shall not offset assets and liabilities, or income and
expenses, unless required or permitted by this Framework.
6. Accrual basis - An entity shall prepare its financial statements, except for cash
flow information, using the accrual basis of accounting. On the accrual basis,
items are recognized as assets, liabilities, equity, income or expenses when they
satisfy the definitions and recognition criteria for those items.
A complete set of financial statements of an entity shall include all of the following:
4) a statement of cash flows for the reporting period. The statement of cash
flows provides information about the changes in cash and cash equivalents of an
entity for a reporting period, showing separately, changes from operating
activities, investing activities and financing activities
a. Profit or loss
b. Payment of dividend
c. Prior period errors
d. Changes in accounting policy
In these cases, an SME is permitted but not required to present a single statement of
income and retained earnings.
An entity shall clearly identify each of the financial statements and the notes and
distinguish them from other information in the same document. In addition, an entity
shall display the following information prominently, and repeat it when necessary for
an understanding of the information presented:
a) the name of the reporting entity and any change in its name since the end of the
preceding reporting period;
SMEs – Financial Statements
Financial statements
b) the fact that the financial statements cover an individual entity or a group of
entities;
c) the date of the end of the reporting period and the period covered by the
financial statements;
d) the currency in which the financial statements are presented; and
e) the level of rounding, if any, used in presenting amounts in the financial
statements.