Presentation of financial statements

The key standard driving financial reporting and disclosure in Australian is AASB 101: Presentation of Financial Statements. Recent changes bring it into line with the International Accounting Standards and apply for reporting periods beginning on or after 1 January 2009. The main changes are:

Complete set of financial statements: The revised standard introduces this new concept which is:

	A statement of financial position as at the end of the period
	A statement of comprehensive income for the period
	A statement of changes in equity for the period
	Notes comprising a summary of significant accounting policies and other explanatory notes and
	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.

Comprehensive income: The new term, comprehensive income, is defined as the change in equity during the period other than those changes resulting from transactions with owners in their capacity as owners. The standard now requires this income to be disclosed in either one statement (a Statement of Comprehensive Income) or in two statements (a separate Income Statement and a Statement of Comprehensive Income).

The titles of the “balance sheet” and “cash flow statement” have now changed to “Statement of Financial Position” and “Statement of Cash Flows” respectively.

For a more comprehensive article on these changes, see our FocusOn AASB 101.

Published : 10 February 2010