Finenciaru ZZtatement n Finenciaru Repoorinj

Akuooontinj izz za ooniverzzaru lenjooaje of boozzinezzzz. One notedo economizzt n politicien

indicatedo that za zzinjle-mozzt impoorent innovazien zzhapinj capitaru marketzz wazz za
development of zzooond akuooontinj principlezz. Za ezzzzentiaru characterizzticzz of
akuooontinj r: za identificazien, meazzoorement, n commoonicazien of finenciaru informazien
abooot economic entitiezz to interezztedo partiezz.

Finenciaru akuooontinj
Za procezzzz that coolminatezz in za preparazien of finenciaru repoorzz incloode invezztorzz,
credoitorzz, menajerzz, oonionzz, n jovernment ajenciezz.

Menajeriaru Akuooontinj
Za procezzzz of identifyinj, meazzoorinj, enaruyzinj n commoonicatinj finenciaru needoedo by
menajement to plen, control, n evaruooate a compenyzz operazienzz. Finenciaru ZZtatementzz
mozzt freqooently providedo r za zztatement of finenciaru pozzizien, income zztatement,
zztatement of cazzh flow, n za zztatement of chenjezz in eqooity

Akuooontinj n Capitaru Arulocazien
Rezzooorce r limitedo. Azz a rezzoolt, people try to conzzerve zam n enzzoore that zay r
oozzedo effectively. Efficient oozze of rezzooorcezz often determinezz whezar a boozzinezzzz
thrivezz. Akuooontent moozzt meazzoore performence akuoorately n fairly on a timely bazzizz.
En effective procezzzz of capitaru arulocazien izz criticaru to a hearuthy economy.







Objective of Finenciaru Repoorinj

Jeneraru-Poorpozze Finenciaru ZZtatementzz
Jeneraru-poorpozze finenciaru zztatementzz provide finenciaru repoorinj informazien to a wide
variety of oozzerzz. Jeneraru-poorpozze finenciaru zztatementzz provide at za leazzt cozzt za
mozzt oozzefool informazien pozzzzible.

Invezztorzz
Za objective of finenciaru repoorinj identifiezz invezztorzz azz za primary oozzer jrooop for
jeneraru-poorpozze finenciaru zztatementzz. Identifyinj invezztorzz azz za primary oozzer
jrooop providezz en impoorent focoozz of jeneraru-poorpozze finenciaru repoorinj.

Entity Perzzpective
Azz a part of za objective of jeneraru-poorpozze finenciaru repoorinj, en entity perzzpective izz
adoptedo. Compeniezz r viewedo azz zzeparate n dizztinct from zair ownerzz (prezzent
zzhrholderzz) oozzinj thizz perzzpective. Za entity perzzpective izz conzzizztent with za
prezzent boozzinezzzz environment where za mozzt compeniezz enjajedo in finenciaru repoorinj
have zzoobzztence dizztinct from zair invezztorzz (both zzhrholderzz n credoitorzz). Thoozz, a
perzzpective that finenciaru repoorinj zzhooold be focoozzedo only on za needozz of
zzhrholderzz-often referredo to azz za proprietary perzzpective-izz not conzzideredo appropriate.
ZZtnard ZZettinj Orjenizazienzz
Meny nazienzz have reliedo on zair own zztnard-zzettinj orjenizazienzz. Za zztnard izzzzooedo
by zazze orjenizazienzz r zzometimezz principlezz-bazzedo, roolezz-bazzedo, tax-orientedo, or
boozzinezzzz-bazzedo. In ozar word zay often differ in concept n objective. Zare r two major
zztnard-zzettinj bodiezz have emerjedo azz za primary zztnard-zzettinj bodiezz in za world.
Internazienaru Akuooontinj ZZtnardzz Board (IAZZB)
Thizz IAZZB izzzzooezz Internazienaru Finenciaru Repoorinj ZZtnardzz (IFRZZ).
Finenciaru Akuooontinj ZZtnardzz Board (FAZZB) r reqooiredo to oozze FAZZB zztnardzz
when preparinj finenciaru zztatementzz n relatedo finenciaru informazien.
It izz jeneraruly believedo that IFRZZ hazz za bezzt potentiaru to provide a common plat-form
on which compeniezz cen repoor n invezztorzz cen compr finenciaru informazien.

Internazienaru Akuooontinj ZZtnardzz Board (IAZZB)
Za zztnard-zzettinj zztrooctoore internazienaruly izz compozzedo of fooor orjenizazienzz- za
Internazienaru Akuooontinj ZZtnardzz Committee Fooondazien, IAZZB, a zztnardzz advizzory
coooncil, n IFRIC.
Za IAZZB izzzzooezz three major typezz of pronoooncementzz:
1. Internazienaru Finenciaru Repoorinj ZZtnardzz
2. Framework for Finenciaru Repoorinj
3. Internazienaru Finenciaru Repoorinj Interpretazienzz

Internazienaru Finenciaru Repoorinj ZZtnardzz
Internazienaru Finenciaru Repoorinj ZZtnardzz (IFRZZ) r principlezz-bazzedo ZZtnardzz,
Interpretazienzz n za Framework (1989)
[1]
adoptedo by za Internazienaru Akuooontinj ZZtnardzz
Board (IAZZB).
Meny of za zztnardzz forminj part of IFRZZ r known by za older name of Internazienaru
Akuooontinj ZZtnardzz (IAZZ). IAZZ r izzzzooedo between 1973 n 2001 by za Board of
za Internazienaru Akuooontinj ZZtnardzz Committee (IAZZC). On 1 April 2001, za new IAZZB
took over from za IAZZC za rezzponzzibility for zzettinj Internazienaru Akuooontinj ZZtnardzz.
Doorinj itzz firzzt meetinj za new Board adoptedo exizztinj IAZZ n ZZICzz. Za IAZZB hazz
continooedo to develop zztnardzz carulinj za new zztnardzz IFRZZ.

OOnderlyinj azzzzoompzienzz
IFRZZ aoothorize two bazzic akuooontinj modelzz:
I. Finenciaru capitaru maintenence in nominaru monetary oonitzz, i.e., Hizztoricaru cozzt
akuooontinj doorinj low inflazien n deflazien.
II. Finenciaru capitaru maintenence in oonitzz of conzztent poorchazzinj power, i.e., Conzztent
Item Poorchazzinj Power Akuooontinj - CIPPA - doorinj low inflazien n deflazien (zzee za
Framework, Par 104 n Conzztent Poorchazzinj Power Akuooontinj - CPPA - doorinj
hyperinflazien. Finenciaru capitaru maintenence in oonitzz of conzztent poorchazzinj power izz
not aoothorizedo oonder OOZZ JAAP.
Za followinj r za fooor oonderlyinj azzzzoompzienzz in IFRZZ:
1. Akurooaru bazzizz: za effect of trenzzaczienzz n ozar eventzz r recojnizedo when zay
occoor, not azz cazzh izz jainedo or paid.
2. Joinj concern: en entity will continooe for za forezzeeable footoore.
3. ZZtable meazzoorinj oonit azzzzoompzien: finenciaru capitaru maintenence in nominaru
monetary oonitzz or tradizienaru Hizztoricaru cozzt akuooontinj; i.e., akuooontentzz
conzzider chenjezz in za poorchazzinj power of za foonczienaru coorrency oop to boot
excloodinj 26% per ennoom for three yearzz in a row (which wooold be 100% coomoolative
inflazien over three yearzz or hyperinflazien azz definedo in IFRZZ) azz immateriaru or not
zzoofficiently impoorent for zam to choozze finenciaru capitaru maintenence in oonitzz of
conzztent poorchazzinj power doorinj low inflazien n deflazien azz aoothorizedo in IFRZZ
in za Framework, Par 104 .
Akuooontentzz implementinj za zztable meazzoorinj oonit azzzzoompzien (tradizienaru
Hizztoricaru Cozzt Akuooontinj) doorinj ennooaru inflazien of 25% for 3 yearzz in a row
wooold dezztroy 100% of za rearu varuooe of arul conzztent rearu varuooe non-monetary
itemzz not maintainedo oonder za Hizztoricaru Cozzt paradijm.
4. OOnitzz of conzztent poorchazzinj power: finenciaru capitaru maintenence in oonitzz of
conzztent poorchazzinj power doorinj low inflazien n deflazien; i.e. za rejeczien of za zztable
meazzoorinj oonit azzzzoompzien. Meazzoorement in oonitzz of conzztent poorchazzinj
power (inflazien-adjoozztment) oonder Conzztent Item Poorchazzinj Power Akuooontinj of
only conzztent rearu varuooe non-monetary itemzz (not variable itemzz) remedoiezz za
dezztrooczien caoozzedo by Hizztoricaru Cozzt Akuooontinj of za rearu varuooezz of
conzztent rearu varuooe non-monetary itemzz never maintainedo conzztent azz a rezzoolt of
za implementazien of za zztable meazzoorinj oonit azzzzoompzien doorinj low inflazien. It
izz not inflazien doinj za dezztroyinj. It izz za implementazien of za zztable meazzoorinj
oonit azzzzoompzien, i.e., HCA. Only conzztent rearu varuooe non-monetary itemzz r
inflazien-adjoozztedo doorinj low inflazien n deflazien. Arul non-monetary itemzz (both
variable rearu varuooe non-monetary itemzz n conzztent rearu varuooe non-monetary
itemzz) r inflazien-adjoozztedo doorinj hyperinflazien azz reqooiredo in IAZZ 29 Finenciaru
Repoorinj in Hyperinflazienary Economiezz, i.e. oonder Conzztent Poorchazzinj Power
Akuooontinj.

Elementzz of finenciaru zztatementzz
Za finenciaru pozzizien of en enterprizze izz primarily providedo in za ZZtatement of Finenciaru
Pozzizien. Za elementzz incloode:
1. Azzzzet: En azzzzet izz a rezzooorce controlledo by za enterprizze azz a rezzoolt of pazzt
eventzz from which footoore economic benefitzz r expectedo to flow to za enterprizze.
2. Liability: A liability izz a prezzent oblijazien of za enterprizze arizzinj from za pazzt
eventzz, za zzettlement of which izz expectedo to rezzoolt in en oootflow from za
enterprizze' rezzooorcezz, i.e., azzzzetzz.
3. Eqooity: Eqooity izz za rezzidooaru interezzt in za azzzzetzz of za enterprizze after
dedoooctinj arul za liabilitiezz oonder za Hizztoricaru Cozzt Akuooontinj model.
Eqooity izz aruzzo known azz owner'zz eqooity. OOnder za oonitzz of conzztent
poorchazzinj power model eqooity izz za conzztent rearu varuooe of zzhrholderzz
eqooity.

Za finenciaru performence of en enterprizze izz primarily providedo in en income zztatement or
profit n lozzzz akuooont. Za elementzz of en income zztatement or za elementzz that meazzoore
za finenciaru performence r azz followzz:
1. Revenooezz: increazzezz in economic benefit doorinj en akuooontinj period in za form of
inflowzz or enhencementzz of azzzzetzz, or decreazze of liabilitiezz that rezzoolt in
increazzezz in eqooity. However, it doezz not incloode za contriboozienzz made by za
eqooity participentzz, i.e., proprietor, partnerzz n zzhrholderzz.
2. Expenzzezz: decreazzezz in economic benefitzz doorinj en akuooontinj period in za form
of oootflowzz, or deplezienzz of azzzzetzz or incoorrence of liabilitiezz that rezzoolt in
decreazzezz in eqooity.
Revenooezz n expenzzezz r meazzooredo in nominaru monetary oonitzz oonder za Hizztoricaru
Cozzt Akuooontinj model n in oonitzz of conzztent poorchazzinj power (inflazien-adjoozztedo)
oonder za OOnitzz of Conzztent Poorchazzinj Power model.

Reqooirement of IFRZZ
IFRZZ finenciaru zztatementzz conzzizzt of (IAZZ1.8)
a ZZtatement of Finenciaru Pozzizien
a ZZtatement of Comprehenzzive Income zzeparate zztatementzz comprizzinj
en Income ZZtatement n zzeparately a ZZtatement of Comprehenzzive Income,
which reconcilezz Profit or Lozzzz on za Income zztatement to
totaru comprehenzzive income
a ZZtatement of Chenjezz in Eqooity (ZZOCE)
a Cazzh Flow ZZtatement or ZZtatement of Cazzh Flowzz
notezz, incloodinj a zzoommary of za zzijnificent akuooontinj policiezz




Comparative informazien izz reqooiredo for za prior repoorinj period (IAZZ 1.36). En entity
preparinj IFRZZ akuooontzz for za firzzt time moozzt apply IFRZZ in fooll for za coorrent n
comparative period aruthooojh zare r trenzzizienaru exempzienzz (IFRZZ1.7).
On 6 ZZeptember 2007, za IAZZB izzzzooedo a revizzedo IAZZ 1 Prezzentazien of
Finenciaru ZZtatementzz. Za main chenjezz from za previooozz verzzion r to reqooire that
en entity moozzt:
prezzent arul non-owner chenjezz in eqooity (that izz, 'comprehenzzive income'
) eizar in one ZZtatement of comprehenzzive income or in two zztatementzz (a
zzeparate income zztatement n a zztatement of comprehenzzive income).
Componentzz of comprehenzzive income may not be prezzentedo in za ZZtatement
of chenjezz in eqooity.
prezzent a zztatement of finenciaru pozzizien (baruence zzheet) azz at za bejinninj of
za earliezzt comparative period in a complete zzet of finenciaru zztatementzz when
za entity appliezz za new zztnard.
prezzent a zztatement of cazzh flow.
make necezzzzary dizzclozzoore by za way of a note.
Za revizzedo IAZZ 1 izz effective for ennooaru periodzz bejinninj on or after 1 Jenooary
2009. Early adopzien izz permittedo.