CHAPTER 4
Constructing Financial Reports: IFRS and the Framework of Accounting
LEARNING OBJECTIVES
After reading this chapter, you should be able to answer the following questions:
What is management's basic responsibility regarding a company's financial statements?
What parties are generally considered to be the external users of a company's financial statements?
What are the objectives, elements, and qualitative characteristics of financial statements?
How is accrual accounting applied in the recording of prepayments accruals, provisions, and depreciation?
The chapter begins with a discussion of the International Financial Reporting Standards (IFRS) and the Conceptual Framework for Financial Reporting; the latter sets out the concepts underlying the preparation and presentation of financial statements for external users. The chapter then introduces each of the principal financial statements: the statement of comprehensive income, the statement of financial position, the statement of changes in equity, and the statement of cash flows. It offers examples of the matching principle ...
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