Financial statements

Financial statements are a structured representation of the financial position, and financial performance, of an undertaking.

The objective of financial statements is to provide information about the financial position, financial performance, and cash flows, which is useful to a wide range of users in making decisions.

Financial statements also show the results of management’s stewardship of resources. To meet this objective, financial statements provide information about an undertaking’s:
(i) assets;
(ii) liabilities;
(iii) equity;
(iv) income and expenses, including gains and losses;
(v) contributions by, and distributions to owners in their capacity as owners; and
(vi) cash flows.

This information, with other information in the notes, assists users of financial statements in predicting the undertaking’s future cash flows and, their timing and certainty.

A complete set of financial statements comprises:

(i) a statement of financial position as at the end of the period;

(ii) a statement of comprehensive income for the period;

(iii) a statement of changes in equity for the period;

(iv) a statement of cash f lows for the period;

(v) notes, comprising a summary of significant accounting policies and other explanatory information; and

(vi) a statement of financial position as at the beginning of the earliest comparative period when an undertaking applies an accounting policy retrospectively or makes a retrospective restatement of items in its financial statements, or when it reclassifies items in its financial statements.

An undertaking may use titles for the statements other than those used in IAS 1.

An undertaking shall present with equal prominence all of the financial statements in a complete set of financial statements.

An undertaking may present the components of profit or loss either as part of a single statement of comprehensive income or in a separate income statement.

When an income statement is presented it is part of a complete set of financial statements and shall be displayed immediately before the statement of comprehensive income.


An audit report is not compulsory, but it will provide readers with independent assurance of the figures.

Many undertakings present, outside the financial statements, a financial review by management, that describes the main features of the undertaking’s financial performance, and financial position, and the uncertainties it faces.

Such a report may include a review of:
(i) the main factors determining financial performance, including changes in the environment, the undertaking’s response to those changes and their impact, and the policy for investment to maintain (and enhance) performance, including its dividend policy;
(ii) sources of funding and targeted ratio of liabilities to equity; and
(iii) resources not recorded in the statement of financial position in accordance with IFRSs.

Many undertakings also present reports, such as environmental reports and value added statements, particularly in industries in which environmental factors are significant, and when staff are regarded as an important user group.

Reports and statements presented outside financial statements are outside the scope of IFRSs.