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Conceptual framework and Financial statements - Coggle Diagram
Conceptual framework and Financial statements
2 kinds
Financial accounting
For decision makers outside the entity
investors, creditors, government agencies, public
Managerial accounting
Managers inside the entity
budgeting, forecasting, projections
Accounting standards
IFRS = International Financial Reporting Standards
Formulated by IASB
International Accounting Standards Board
Establishes framework across international borders
provides global framework
financial reporting
ensures consistency
and transparency
GAAP = Generally Accepted Accounting Principles
Generated by FASB = Financial Accounting Standards Board
Establishes financial standards In the United States
overview
objection
to provide financial information
to investors
lenders
other creditors in making decisions about providing resources to the entity
FInancial information
FInancial reports
provide information on the entity's
claims
resources
and the changes in them
qualitative characteristics
faithful presentation
enhancing
combarability
verifiability
timeliness
understandability
constraints
cost constraint
accrual accounting
jaksotuskirjanpito
going concern
toiminnan jatkuvuus
elements
Asset
present economic resource controlled by the entity as a result of past events
Liability
present obligation of the entity to transfer an economic resource as a result of past events
equity
the residual interest in the assets of the entity after deducting all the liabilities
income
increasing in assets and decreasing in liabilities resulting in increases in equity
Expenses
increases in liabilities and decreases in assets resulting in decreases in equity except distributions
Questions from decision makers
how did the company perform this year
statement of Comprehensive income
Income statement
revenue - expenses =net income (or net loss)
+- other comprehensive income
total comprehesive income
other comprehensive income
why did the equity change during the year
statement of changes in Equity
Beginning Equity
Total comprehesive income
-Dividends
+- capital transactions (sale of ana asset/ revaluation of an asset) with owners
=Ending Equity
what is the company's financial state at the end of the year
Statement of the financial position
AKA BAlance sheet
Assets = Liabilities + Equity
how much cash was generated and spent
Statement of cashflows
Operating cashflows
+- investing cash flows
+- Financing Cash flows
=net cashflows