Statement of Financial Position

sammyd22

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?

AK002

It's to conform with International Accounting Standards..

DFS is the same...

messedup89

its the same with ACCA F7

sammyd22

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

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

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

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