Summary

Section 4 deals with the presentation of the statement of financial position. The statement of financial position (also known as the balance sheet) presents an entity’s assets, liabilities and equity at the end of the reporting period.

What is new?

The appearance of the statement of financial position has not changed from the appearance of a balance as prepared in accordance with the Companies Act.

What are the key points?

The statement of financial position which can also be called a balance sheet should be laid out in accordance with the formats as specified under the Companies Act.

An entity is required to distinguish those items that are current and non-current. To comply an entity shall present current and non-current assets and current and non-current liabilities as separate classifications in its balance sheet.

An entity shall present additional line items, headings, and sub-totals in the balance sheet when such presentation is relevant to an understanding of the entity’s financial position.

Disclosure is required in either the notes to the financial statements or on the face of the statement of financial position in relation to the following, a description for each reserve within equity and for each class of shares; the number and par value of shares issued, the rights, preferences and restrictions attached to those shares including restrictions on distribution of dividend, shares in the entity held by subsidiaries, joint ventures or associates and a reconciliation of the number of shares at the start and end of the year.

What do accountants need to do?

Be aware of the layout required for the statement of financial position so that financial statements prepared under FRS 102 are compliant.

Advise the client of any changes.

What do companies need to do?

Be aware of the layout required for the statement of financial position so that financial statements prepared under FRS 102 are compliant.