Septiembre 2011

Statement of changes in equity

Statement of changes in equity

This statement consists of two parts:

Statement of recognised income and expense

This statement reflects changes in equity attributable to:

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  The profit or loss for the period per the income statement.
  

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  Income and expense recognised directly in the entity’s equity.
  

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  Amounts recycled to profit or loss.
  

Income and expense items recognised directly in equity and amounts recycled to profit or loss are presented before tax effects (gross presentation), and their tax effect must be allocated separately.

Statement of changes in total equity

Reflects all the changes in equity attributable to:

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  The total balance of recognised income and expense.
  

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  Changes in equity resulting from transactions with shareholders or owners in their capacity as shareholders or owners.
  

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  Other changes in equity.
  

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  Adjustments to equity due to changes in accounting policies and corrections of errors.
  

Statement of cash flows

The statement of cash flows provides information about the origin and use of monetary assets represented by cash and cash equivalents, classifying changes by activity and indicating the net change in cash and cash equivalents during the period.

Classification of cash flows

Cash flows from operating activities
Cash flows from operating activities are primarily derived from the principal revenue-producing activities of the entity and changes therein are reported on a net basis (except for interest, dividends received and income tax).

The gross profit or loss for the period must be adjusted in order to eliminate expense and income that did not give rise to a change in cash and cash equivalents, such as:

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  Adjustments to eliminate:
  

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  Valuation adjustments (depreciation and amortisation charge, impairment losses, gains or losses arising from fair value adjustments and changes in provisions and allowances).
  

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  Activities classified as investing or financing activities (gains or losses on disposals of non-current assets or financial instruments).
  

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  Receipts and payments relating to financial assets and liabilities the cash flows from which must be presented separately.
  

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  Changes in working capital arising from a difference in timing between the actual flow of goods and services relating to operating activities and the related monetary flow.
  

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  Cash flows relating to interest and dividends received.
  

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  Cash flows relating to income tax.
  

Cash flows from investing activities

Payments and receipts arising from the acquisition, disposal or repayment on maturity of non-current assets (intangible assets, property, plant and equipment, investment property and non-current financial assets).

Cash flows from financing activities:

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  Cash proceeds from the acquisition by third parties of securities issued by the entity or from financing granted by banks or third parties.
  

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  Cash repayments of these amounts borrowed or of other financing instruments issued.
  

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  Dividends paid to shareholders.
  

Other matters

In preparing the statement of cash flows the following, among other factors, must be taken into account:

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  Cash flows from transactions in a foreign currency are recorded in an entity’s functional currency by applying the exchange rate at the date of the cash flow, without prejudice to the possibility of applying a representative weighted average exchange rate when there is a significant volume of transactions.
  

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  When hedge accounting is used, the cash flows from the hedging instrument are included in the same line item as those from the hedged item (and this must be disclosed).
  

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  When there are discontinued operations, the cash flows from the various operations are disclosed in the notes to the financial statements.
  

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  Cash flows arising from acquisitions or disposals of groups of assets and liabilities making up a business or line of business are presented as a single line item, namely “Business Unit”, as part of the cash flows from investing activities.