Under IAS 1 Presentation of Financial Statements, which statement is part of a complete set of financial statements for a company?
Answer and explanation
Correct answer: C. A statement of changes in equity
- Step 1: IAS 1 lists the components: statement of financial position, statement of profit or loss and other comprehensive income, statement of changes in equity, statement of cash flows and notes.
- Step 2: Only the statement of changes in equity appears on that list.
- Step 3: The other items are internal or forward-looking documents.
Answer
A statement of changes in equity.
Why not the others: A schedule of aged payables: An aged payables list is an internal ledger report and not one of the primary statements required by IAS 1. A directors' remuneration forecast: A forecast looks to the future, whereas IAS 1 requires statements based on past transactions and events. A cost accounting profit reconciliation: That is a management accounting document and not a required financial statement.
Practise more Context and purpose of financial reporting.
Free questions with an explanation for every one, and full timed ACCA Applied Knowledge (BT, MA, FA) mock tests.
More Context and purpose of financial reporting questions
- Which statement correctly describes a limited liability company as a type of business entity?
- A sole trader's business assets and liabilities are treated in the accounting records as separate from the owner's personal affairs. Which a…
- Which of the following is a user of financial statements who needs information mainly to decide whether to lend money to the entity and expe…
- Which body issues International Financial Reporting Standards (IFRS)?
- Which of the following is the best description of the purpose of the directors' responsibility for a company's financial statements?
- A partnership is formed by three people. Which statement about their legal position is correct?