3.7 Statement of profit or loss and other comprehensive income

Question 1

What did the “statement of financial position” used to be known as?

Answer 1

The balance sheet.

Question 2

What does the statement of financial position comprise of?

Answer 2

1 Assets
2 Liabilities
3 Equity

Question 3

What are some examples of assets?

Answer 3

Property, plant and equipment
Investment property
Intangible assets
Financial assets
Investments
Biological assets
Inventories
Trade and other receivables
Cash and cash equivalents
Assets held for sale.

Question 4

What are some examples of liabilities?

Answer 4

Trade and other payables
Provisions
Financial liabilities
Current tax liabilities and assets
Deferred tax liabilities and assets
Liabilities included in disposal groups

Question 5

What are some examples of equity?

Answer 5

1 Non-controlling interests

2 Issued capital and reserves attributable to owners of the parent.

Question 6

What information must be given about each different item in the statement of financial position?

Answer 6

1 Nature and liquidity of assets and their materiality
2 Function of assets within the entity
3 Amounts, nature and timing of liabilities.

Question 7

What is a non-current asset?

Answer 7

Any tangible, intangible and financial assets of a long-term nature.

Question 8

When is a liability classified as current under IAS1?

Answer 8

When it is:

• expected to be settled in the entity’s normal operating cycle
• held primarily for the purpose of trading
• due to be settled within 12 months of the reporting period
• does not have an unconditional right to defer settlement of the liability

Question 9

What disclosures does AS1 require for each class of share capital issued?

Answer 9

• number of shares authorised
• number of shares issued and fully paid and not full paid
• nominal share value
  reconciliation of number of shares outstanding at the start and end of the period
• rights, preferences and restrictions
• shares held by the entity itself
• shares reserved for issuance under options and sales contracts
• description of the nature and purpose of each reserve

Question 10

How does having an unconditional right to deer settlement of a liability impact on its current/non-current classification?

Answer 10

If there is no unconditional right to defer, then the liability is considered current.