Statement of Financial Position

Options
sammyd22
sammyd22 Registered Posts: 207 Dedicated contributor 🦉
Im studying Cima as ive said in a previous post and im taking my F1 & P1 in May!

Can someone tell me why they have changed the lay out of the Balance Sheet or " Statement of Financial Position " as its now called?

They have slipped equity in between Assets & Liabilities? Now its layed out as (Assets - Equity = Liabilities) rather than (Assets - Liabilities = Equity).

Before it was immediatly obvious to see the Net Current Assets or liquidity of a company and although you can still work it out quite easily mathematically it just seems pointless to me.

Can anyone clear this up?

What do you think of it?

Comments

  • AK002
    AK002 Registered Posts: 2,492 Beyond epic contributor 🧙‍♂️
    Options
    It's to conform with International Accounting Standards..

    DFS is the same...
  • messedup89
    messedup89 Registered Posts: 1,281 Beyond epic contributor 🧙‍♂️
    Options
    its the same with ACCA F7
  • sammyd22
    sammyd22 Registered Posts: 207 Dedicated contributor 🦉
    Options
    Not sure why they have changes! I know its in line with IAS rules but im not quite sure why they have done it!

    I would naturally say "If it isnt broke dont fix it", but the question is "was it broke in the first place"?

    Maybe someone else is better equipped to answer this? The ACCA accountant i work with thinks its a load of rubbish.

    I Much preffered it before but the figures are all there still at the end of the day!
  • Steve Collings
    Steve Collings Registered Posts: 997 Epic contributor 🐘
    Options
    What you generally find with IFRS/IAS changes is that the IASB will make changes to them to converge them more or less with US GAAP as the IASB desperately want the US to adopt IFRS. IAS 1 was revised in 2007 and made the following terminology changes:

    Balance sheet = statement of financial position.
    Income statement = statement of comprehensive income (one statement) OR
    income statement (separate) and Statement of comprehensive income (two statements)
    Minority interests = non-controlling interests
    Reporting date = end of the reporting period
    Cash flow statement = statement of cash flows
    Each balance sheet date = the end of each reporting period
    Standard or interpretation = IFRS
    IAS 10 was 'Events after the balance sheet date'
    IAS 10 is now 'Events after the reporting date'
    Equity holders = owners



    The income statement now has an additional bit to it known as the 'other comprehensive income'. So you will see:

    Income Statement:

    Revenue
    Cost of sales
    Distribution Costs
    Admin expenses
    Finance costs
    Profit before tax
    tax
    Profit after tax

    Other comprehensive income: (replaces statement of recognised income and expenses):
    Revaluation gains on PPE
    Actuarial gains/losses on defined benefit pension scheme
    Exchange diffs on translation of foreign operations
    Cash flow hedges
    Share of other comprehensive income of associates
    Available for sale financial assets

    Not all of the above are examinable for AAT purposes, but some will be for ACCA. And yes, ACCA F7 also incorporates the new terminology.

    Regards
    Steve
  • PGM
    PGM Registered Posts: 1,954 Beyond epic contributor 🧙‍♂️
    Options
    sammyd22 wrote: »
    Can someone tell me why they have changed the lay out of the Balance Sheet or " Statement of Financial Position " as its now called?

    Does anyone know where to find good templates for the new balance sheet and P&L layouts?
  • sammyd22
    sammyd22 Registered Posts: 207 Dedicated contributor 🦉
    Options
    PGM wrote: »
    Does anyone know where to find good templates for the new balance sheet and P&L layouts?

    I have templates at home and can email them tomorrow as pdf if thats any good?

    Let me know.

    Thanks
Privacy Policy