Question

D. Describe FIVE basic elements of financial statements recognised under AASB Framework: The Framework for the Preparation and Presentation of Financial Statements.

Answer 1

Five basic Elements of Financial Statements recognised under AASB Framwork are:

• Statement of Financial Position or Balance Sheet,
• Statement of Financial Performance, or Income Statement,
• Statement of Change in Equity,
• Statement of Cash flow, and
• Noted to Financial Statements.

FRAMEWORK FOR THE PREPARATION AND PRESENTATION OF FINANCIAL STATEMENTS Application Aus1.1 The concepts in this Framework are not set out as requirements for the purpose of preparing general purpose financial reports. This is consistent with the:

      (a) purpose of Statements of Accounting Concepts set out in Policy Statement 5 The Nature and Purpose of Statements of Accounting Concepts.

     (b) non-mandatory status of Statements of Accounting Concepts under Professional Statement APS 1 Conformity with Accounting Standards.

      (c) Australian Securities and Investments Commission Act 2001, section 227(1).

Aus1.2 This Framework applies to periods beginning on or after 1 January 2005.

Aus1.3 This Framework shall not be applied to annual reporting periods beginning before 1 January 2005.

Aus1.4 When applicable, this Framework supersedes:

        (a) Statement of Accounting Concept SAC 3 Qualitative Characteristics of Financial Information as issued in August 1990

        (b) Statement of Accounting Concept SAC 4 Definition and Recognition of the Elements of Financial Statements as issued in March 1995.

Aus1.5 SAC 3 and SAC 4 remain applicable until superseded by this Framework.

Aus1.6 The term financial statements in the title of this Framework means a financial report.