BY: MUH. ARIEF EFFENDI, SE, MSI, AK, QIA,CPMA, CA MAGISTER ACCOUNTING PROGRAM (MAKSI) PASCA SARJANA UNIVERSITAS BUDI LUHUR JAKARTA 2nd REVISED- SEPTEMBER 2013 MODUL-02 FINANCIAL ACCOUNTING THE FINANCIAL STATEMENT PART I : STATEMENT OF FINANCIAL POSITION / BALANCE SHEET
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BY:
MUH. ARIEF EFFENDI, SE, MSI, AK, QIA,CPMA, CA
MAGISTER ACCOUNTING PROGRAM (MAKSI)
PASCA SARJANA UNIVERSITAS BUDI LUHUR
JAKARTA
2nd REVISED- SEPTEMBER 2013
MODUL-02 FINANCIAL ACCOUNTING
THE FINANCIAL STATEMENT PART I :
STATEMENT OF FINANCIAL POSITION /
BALANCE SHEET
THE FINANCIAL STATEMENT PART I :
STATEMENT OF FINANCIAL POSITION /
BALANCE SHEET
After studying this topic, students should be able to:
1. Understand the usefullness of a statement of financial position.
2. Explain the uses and limitations of a statement of financial position.
3. Identify the major classifications of the statement of financial position.
4. Prepare a classified statement of financial position using the report and account
formats.
5. Understand the comparison of financial statement presentation The US GGAP VS
IFRS.
Statement of Financial Position
Statement of Financial Position, also referred to as the
balance sheet:
1. Reports assets, liabilities, and equity at a specific date.
2. Provides information about resources, obligations to
creditors, and equity in net resources.
3. Helps in predicting amounts, timing, and uncertainty of
future cash flows.
Computing rates of return.
Evaluating capital structure.
Assess risk and future cash flows.
Analyze company’s:
Liquidity
Solvency
Financial flexibility
Usefulness
Statement of Financial Position
Most assets and liabilities are reported at historical
cost.
Use of judgments and estimates.
Many items of financial value are omitted.
Limitations
Statement of Financial Position
Classification
Statement of Financial Position
Statement of Financial Position
In some countries, such as Germany, companies often list current assets first.
IAS No. 1 requires companies to distinguish current assets and liabilities from
non-current ones, except in limited situations.
Generally consists of:
Long-term Investments
Property, Plant, and Equipment
Intangibles Assets
Other Assets
Classification
Non-Current Assets
Long-term Investments
1. Securities (bonds, ordinary shares, or long-term notes).
2. Tangible assets not currently used in operations (land held
for speculation).
3. Special funds (sinking fund, pension fund, or plant
expansion fund.
4. Non-consolidated subsidiaries or associated companies.
Non-Current Assets
Classification
Investments in Debt and Equity Securities
Classification
Portfolio Type Valuation Classification
Held-for-
Collection Debt
Amortized
Cost
Current or
Noncurrent
Trading Debt or Equity Fair Value Current
Non-Trading
Equity Equity Fair Value
Current or
Noncurrent
Long-Term Investments
Classification
Illustration
Statement of Financial osition Presentation of Long-Term Investments
Tangible long-lived assets used in the regular operations
of the business.
Physical property such as land, buildings, machinery,
furniture, tools, and wasting resources (minerals).
With the exception of land, a company either depreciates
(e.g., buildings) or depletes (e.g., oil reserves) these
assets.
Property, Plant, and Equipment
Classification
Classification
Illustration
Statement of Financial Position Presentation of Property, Plant, and Equipment