Question

Question 1: “Financial statements are a structured representation of the financial position and financial performance of an entity. The objective of financial statements is to provide information about the financial position, financial performance, and cash flows of an entity that is useful to a wide range of users in making economic decisions.” AASB 101 Presentation of Financial Statements In your own words, define the various elements of financial statements and discuss how they contribute to the objective of providing information for users in making decisions.

Answer 1

Answer P.Nol According to data AASB 101 Presentation en francial Statements The objective of this standard is to prescribe the basis for the presentation of general purpose financial Statements to ensure comparability both with the entity's financial Statements of previous periods and with the financial Statements of other entities! financial statements include D statement of financial position statement of financial position at balance sheet shows the company's Capital, auds, liabilities, and owners equity at a given point of time Comprehesive focome - Statement Income of protit and loss statement show the slevenue and expenses of a company for the perid. s) Statement of Cash flows statement flows indicates the inflow and outflow of Cach & statement of Cash

statement and during the period that as it shows the secipts and payments of Cash from operating financing and inverting activities of the company. financial statement includes of of financial position as at the end of the period, Statement of Comprehensive income for the period Statement of Cash flows for the period. Elements of financial statements D Assets - Assels are financially owned phenomena which dolives the storage value in terms of money They are accounting secatche at the areet Side of the balance sheet a) Tangible assets physical asset. Tangible assels Can be seen , touched, felt, etc. Ex:- physical areed like machinery, plant, furniture, etc. Tangible asset means

fexed assets which D) Current asset B) Sintangible asset Intangible assets are assets which do not have a physical existence. Intangible auers Cannot be Soen, touched, felt, etc et Goodwill, patent, etc. exed assets are those arsts purchased for long term use and which provides benefits for a longer period ex in machinery, furniture, Buildings, etc. Current Assels are those assly which can earily Converted into Carh and generally absorbed in one accounting period. 8) Liabilities thabilities is what a company owns to the owners and outsiders. Ceabolition can be clauifled into 7 Current liabilities Current fabolories are the liabolitios which has to be paid during the Current financial 4202- Ex :- Geditors, billy payable etc. be easil

Non-Current liabilities Non-Current liablelies are the company's long term liability that is not due within a year ex-denbenturies, bonds, long term. loans etc. 3Equity - Equity ºf Simply the amount Capital Contributed by the owners. It is the value attributable to the owners business. Revenue Revence is the income which the business our company generates from als normal busines activities of operations usually from the Sale of goode and goode and services to Customers Gains Gains is increase in owner's equity from transaction not related to normal business operations 67 Expences - Expenses is outflow of Cash done with the purpose to generate revenue, fx- the Company incurs expenses on selling and distribution activities.

Bendits of elements of financial Statements D Statement of Financial position Statement of financial position is an evential element of financial Statement as it indicates the financial position of a company at a porficeelaa point of à Statement of comprehensive Income - Statement of Comporehensive income is another essential Statement of financial statement which indicats the income and expense of company during a given period of time. 3) Statement of Cash flows Statement of Cach flows shows the inflow and outflow of Cach during given period of time. It shows the total Cash receipts and payments from operating, Ranesting, and financing activities of the a Company

6 Benefits of nanofal Statements * It provides clear theight into the financial peration of a company, financial statements polevents irrelevant expenditures and tas increases Savings and help the Company to depeloy funds into valuable and profitable investment * The elements of financial Statement reveals the Profits, liabllo, losses, etc and thus help proped Strategic decision making.. * The elements of financial Statemuts are expressed in talfos in reation analysis plean give ive me positive vote. Tq.... !