The Statements of Financial Position (Balance Sheet) and Changes in Equity

About This Chapter

All companies, whether manufacturing goods, retailing, or providing ­services, incur costs. In the previous chapter we considered the treatment of costs on the profit or loss account and consolidated financial statements. Any charge to the profit or loss account will reduce the amount of profit for that financial period.

In this chapter, we consider two other financial statements that companies must produce. First we consider the statement that reveals whether a company is financially sound. To answer that question, we need to refer to the balance sheet, named in the standard as the statement of financial position. The second statement we examine ...

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