CHAPTER 3—FINANCIAL STATEMENTS AND THE
REPORTING ENTITY
FINANCIAL STATEMENTS
3.1
Objective and scope of financial statements
3.2
Reporting period
3.4
Perspective adopted in financial statements
3.8
Going concern assumption
3.9
THE REPORTING ENTITY
3.10
Consolidated and unconsolidated financial statements
3.15
Conceptual Framework
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Financial statements
Chapters 1 and 2 discuss information provided in general purpose financial
reports and Chapters 3–8 discuss information provided in general purpose
financial statements, which are a particular form of general purpose financial
reports. Financial statements
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provide information about economic resources
of the reporting entity, claims against the entity, and changes in those
resources and claims, that meet the definitions of the elements of financial
statements (see Table 4.1).
Objective and scope of financial statements
The objective of financial statements is to provide financial information about
the reporting entity’s assets, liabilities, equity, income and expenses
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that is
useful to users of financial statements in assessing the prospects for future net
cash inflows to the reporting entity and in assessing management’s
stewardship of the entity’s economic resources (see paragraph 1.3).
That information is provided:
(a)
in the statement of financial position, by recognising assets, liabilities
and equity;
(b)
in the statement(s) of financial performance,
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by recognising income
and expenses; and
(c)
in other statements and notes, by presenting and disclosing
information about:
(i)
recognised assets, liabilities, equity, income and expenses (see
paragraph 5.1), including information about their nature and
about the risks arising from those recognised assets and
liabilities;
(ii)
assets and liabilities that have not been recognised (see
paragraph 5.6), including information about their nature and
about the risks arising from them;
(iii)
cash flows;
(iv)
contributions from holders of equity claims and distributions
to them; and
(v)
the methods, assumptions and judgements used in estimating
the amounts presented or disclosed, and changes in those
methods, assumptions and judgements.
3.1
3.2
3.3
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Throughout the Conceptual Framework, the term ‘financial statements’ refers to general purpose
financial statements.
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Assets, liabilities, equity, income and expenses are defined in Table 4.1. They are the elements of
financial statements.
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The Conceptual Framework does not specify whether the statement(s) of financial performance
comprise(s) a single statement or two statements.
Conceptual Framework
© IFRS Foundation
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