International Financial       Reporting Standards:objectives | assumptions | characteristics | elements               Pres...
Objectives of Financial Statement• Primary objective is to assist in  decision making• Other objectives include; to  provi...
Two Basic Accounting Models              Authorized by IFRSFinancial capital maintenance in     Financial capital maintena...
Four Underlying Assumptions of IFRS• Accrual basis: transactions are recorded as and when they  occur even if the amount i...
Characteristics of Financial Statements• Understandability• Reliability• Relevance• Comparability
Elements of Financial Statements• Asset: An asset is what is owned by the company from the  past events which gives future...
Elements of Financial Statements• Revenues: It is the income that a company receives during its  normal business activitie...
Thank You
Upcoming SlideShare
Loading in …5
×

IFRS (Financial Management)

1,396 views

Published on

Presentation on "IFRS" by Shabbir Akhtar (PGPM 10, Globsyn Business School - Global Campus) for the subject "Financial Management"

Published in: Business, Economy & Finance
0 Comments
1 Like
Statistics
Notes
  • Be the first to comment

No Downloads
Views
Total views
1,396
On SlideShare
0
From Embeds
0
Number of Embeds
3
Actions
Shares
0
Downloads
3
Comments
0
Likes
1
Embeds 0
No embeds

No notes for slide

IFRS (Financial Management)

  1. 1. International Financial Reporting Standards:objectives | assumptions | characteristics | elements Presented by – Shabbir Akhtar (PGPM 10, Globsyn Business School – Global Campus)
  2. 2. Objectives of Financial Statement• Primary objective is to assist in decision making• Other objectives include; to provide information about... resources and obligations changes in such resources and obligations changes in net resources• And; information that... assists in estimating the earning potentials is needed by the users of the statements
  3. 3. Two Basic Accounting Models Authorized by IFRSFinancial capital maintenance in Financial capital maintenance in unitsnominal monitory units of constant purchasing powerHistorical cost accounting during It is the constant item purchasinglow inflation and deflation – power accounting during lowUnder this concept, a profit is inflation and deflation andearned only if the financialamount of the net assets at the constant purchasing powerend of the period exceeds the accounting during hyperinflation.financial amount of net assets at Financial capital maintenance inthe beginning of the period, after units of constant purchasingexcluding any distributions to, power is not authorized underand contributions from, ownersduring the period. US GAAP.
  4. 4. Four Underlying Assumptions of IFRS• Accrual basis: transactions are recorded as and when they occur even if the amount is not received or paid.• Going concern: an entity will continue for the following years.• Stable measuring unit assumption: financial capital maintenance in nominal monetary units or traditional Historical cost accounting• Units of constant purchasing power: financial capital maintains a constant purchasing power during low inflation and deflation
  5. 5. Characteristics of Financial Statements• Understandability• Reliability• Relevance• Comparability
  6. 6. Elements of Financial Statements• Asset: An asset is what is owned by the company from the past events which gives future benefits.• Liability: A liability is a present obligation of the enterprise arising from the past events, which is to be settled in the future if required from its available assets.• Equity: Equity is also known as owners equity. It is the constant real value of shareholders´ equity.• Statement of Changes in Equity: It states the total comprehensive income, owners investment, dividends, reconciliations etc.
  7. 7. Elements of Financial Statements• Revenues: It is the income that a company receives during its normal business activities usually from sale of goods and services to customers. Some companies receive revenue from interest, dividend and royalties as well.• Expenses: It is outflow of money to another person or group to pay for an item or service. It reduces owners equity.• Statement of Cash Flows: It is a financial statement that shows changes in balance sheet accounts and income affects cash and cash equivalents and breaks the activities down to operating, financial and investing activities. It shows the inflow and outflow of cash.
  8. 8. Thank You

×