General Requirements for Financial Statements

The required financial statements

• Balance sheet
• Income statement
• Cash flow statement
• Statement of changes in owner's equity
• Explanatory notes

Fundamental principles for preparing financial statements under IAS:

• Fair presentation
• Going concern - unless management intends to /must liquidate it
• Accrual asis
• Consistency
• Materiality - free of misstatemetns or omissons that will influence decision

Principles for presenting financial statements

• Aggregation of similar items and separation of dissimilar items
• No offsetting of assets against liabilities or income against current unless permitted
• A classified balance sheet
• Minimum information is required on the face of each financial statement and in the notes
• Comparative information for prior periods is included.

Note:

• At present, IASB and FASB have differences in serveral aspects under their frameworks. Company may need to present a reconciliation statement by using an alternative reporting system.
• SEC requires company to reconcile their financial statements to US GAAP if they want to issue securities in US.