PRESENTATION OF FS

• it presents the assets, liabilities, and equit


  satement of financial position
• what is the incorrect statement?

  * It expects to realize the asset, or intends to sell or consume it, in its normal operating cycle

  *It holds the asset primarily for the purpose of trading

  *It expects to realize the asset within 9 months after the reporting period

  *The asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

  third (12 months)
• The time between the acquisition of assets for processing and their realization cash or cash equivalents.


  Normal Operating Cycle
• Line items under current assets are

  Cash and cash equivalents

  Trade and other receivables Financial asset at Fair Value through Profit of Loss Inventories

  Prepaid expenses

  intangible assets

  ano ang hindi kasama

  inatngible assets
• The following are examples of non-current assets:

  Property, plant, and equipment

  Intangible assets

  Investment property

  Financial assets that are not expected to be realized in cash in the entity’s normal operating cycle or within 9 months after the reporting period

  ano ang mali?

  4th (12)
• Liabilities An entity shall classify a liability as current when:  It expects to settle the liability in its normal operating cycle

   It holds the liability primarily for the purpose of trading

   The liability is due to be settled within twelve months after the reporting period

   The entity does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period
• Current liabilities include

   Trade and other payables

   Current provisions

   Short-term borrowings

   Current portion of long-term debt  Current tax liability
• An entity shall classify all other liabilities as non-current, such as:

   Long term notes payable that are due beyond 12 months from the end of the reporting period

   Bonds payable that are due beyond twelve months after the reporting period

   Long-term notes payable that are due within twelve months after the reporting period, but which terms is extended on a long-term basis and negotiation has been competed before the end of the reporting period.
• An entity classifies its financial liabilities as current when they are due to be settled within twelve months after the end of the reporting period, even if: true or false

  The original term was for a period longer than twelve months;

  TRUE
• An entity classifies its financial liabilities as current when they are due to be settled within twelve months after the end of the reporting period, even if: true or false

  The intention is supported by an agreement to refinance, or reschedule the payments, on a long-term basis is completed after the end of the reporting period and completed before the financial statements are authorized for issue

  TRUE
• What are the 3 Forms of the Statement of Financial Position

  *account form

  *report form

  *financial position form
• which looks like a T account, where assets are listed on the left side of the statement while liabilities and equity are listed on the right side

  account form
• form that presents the assets, liabilities, and equity in a continuous format. Liabilities are presented after total assets and equity accounts are listed after the liabilities section


  report form
• form emphasizes working capital of the firm. In this format, net assets are equal to the equity.

  financial position
• is the change of equity during a period other than changes resulting from transactions with owners in their capacity as such. Comprehensive income includes profit or loss and other comprehensive income.

  Comprehensive income
• is the total income less expenses excluding the components of other comprehensive income

  profit and loss
• what are the two types of OCI items

  those that are reclassified to profit or loss and those that are reclassified to Retained Earnings.
• OCI includes the following Components of OCI that will be reclassified subsequently to profit, or loss include the following:

   Unrealized gain or loss on debt investments measured at fair value through other comprehensive income

   Unrealized gain or loss from derivative contracts designated as cash flow hedge

   Translation gains and losses of foreign operations
• Components of OCI that will be reclassified subsequently to retained earnings include the following:

   Unrealized gain or loss on equity investments measured at fair value through other comprehensive income

   Change in Revaluation Surplus

   Remeasurement gains and losses for defined benefit plans

   Change in fair value arising from credit risk for financial liabilities measured at fair value through profit or loss
• WHAT METHOD THAT THE Expenses are aggregated in the income statement according to their nature and are not reallocated among various functions within the entity.


  Nature of expense method
• WHAT METHOD THAT THE Classifies expenses according to their function as part of cost of sales or, for example, the cost of distribution or administrative activities.

  Function of expense or cost of sales method
• information provides users of financial statements with a basis to assess the ability of the entity to generate cash and cash equivalents and the needs of the entity to utilize those ?

  CASH FLOW
• Cash flows from ? are primarily derived from the principal revenue-producing activities of the entity. E


  OPERATING ACTS
• Therefore, cash flows arising from the purchase and sale of dealing or trading securities are classified as operating activities. TRUE OR FALSE


  TRUE
• cash advances and loans made by financial institutions are usually classified as operating activities since they relate to the main revenue-producing activity of that entity. TRUE OR FALSE?

  TRUE
• are the cash flows derived from the acquisition and disposal of lonterm assets and other investment not included in cash equivalents. Only expenditures that result in a recognized asset in the statement of financial position are eligible for classification as ?

  Investing activitie
• ? activities include cash transactions affecting non-trade liabilities, and shareholders’ equity

  FINANCING
• WHICH SENTENCE IS INCORRECT

  1. .Interest paid and interest and dividends received; as operating cash flows because they enter into the determination of profit or loss.
  2. interest paid and interest and dividends received ; financing cash flows and investing cash flows
  3. Dividends paid; operating cash flow because they are a cost of obtaining financial resources.
  4. dividends paid; operating activities in order to assist users to determine the ability of an entity to pay dividends out of operating cash flows.

  3 (financing)
• Cash flows arising from ? shall be separately disclosed and shall be classified as cash flows from operating activities unless they can be specifically identified with financing and investing activities.

  taxes on income
• what method of cash flow whereby major classes of gross cash receipts and gross cash payments are disclosed;

  direct method
• what method of cash flow whereby profit or loss is adjusted for the effects of transactions of a non-cash nature, any deferrals or accruals of past or future operating cash receipts or payments, and items of income or expense associated with investing or financing cash flows.

  indirect method
• 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

  Materiality and aggregation
• An entity shall not offset assets and liabilities or income and expenses, unless required or permitted by an

  IFRS
• An entity shall present a complete set of financial statements (including comparative information) at least ?

  annually.
• When an entity changes the end of its reporting period and presents financial statements for a period longer or shorter than one year, an entity shall ?

  disclose
• An entity shall present, as a minimum, two statements of financial position, two statements of profit or loss and other comprehensive income, two separate statements of profit or loss (if presented), two statements of cash flows and two statements of changes in equity, and related notes. true or false?

  true
• In some cases, ? provided in the financial statements for the preceding period(s) continues to be relevant in the current period.

  narrative information
• Under these circumstances, an entity shall present three statements of financial position as at: what are those?


   the end of the current period;  the end of the preceding period; and  the beginning of the preceding period.
• what limitaions of the financial statement affect this: Assets measured at historical costs reflect the level of purchasing power when those assets are acquired at different dates.

  Inflationary effects
• If the inflation rate is relatively low, the amounts reported in the financial statements will appear inordinately low since under the cost model, the assets are not adjusted for inflation. TRUE OR FALSE?

  false (low dot sa inflation)