CAT / FIA FFA Syllabus F. Preparing Basic Financial Statements - Statements of financial position - Notes ^{4 / 4}

1. To show company results

2. To demonstrate effective stewardship by the directors

3. To provide information on the elements (assets, liabilities, equity, income and expenses)

4. To show owners' contribution / distribution to the owners

5. To show cash flows

Statement of financial position (Example)

Remember

• Total Assets = Total Liabilities

• Current assets are held primarily for trading purposes and are expected to be realised within 12 months of the end of the reporting period. For e.g. trade receivables, tax refund

  Whereas, non current assets are held for longer than 12 months.

• Non-current liabilities are those which will be settled over a period longer than 12 months. 

  Current liabilities are settled within 12 months. For e.g. Bank overdrafts, accrued expenses, etc