Wiley 2022 Interpretation and Application of IFRS Standards

4STATEMENT OF FINANCIAL POSITION

• Introduction
• Scope
• Definitions of Terms
• General Concepts, Structure and Content
  • General Concepts
  • Structure and Content
• Classification of Assets
  • Current Assets
  • Non‐Current Assets
  • Other Assets
• Classification of Liabilities
  • Current Liabilities
  • Non‐Current Liabilities
  • Offsetting Assets and Liabilities
• Classification of Shareholders’ Equity
  • Share Capital
  • Retained Earnings
  • Disclosure of Share Capital
• Future Developments
• US GAAP Comparison

INTRODUCTION

The statement of financial position (or the balance sheet) is a statement that presents an entity's assets, liabilities and equity (or net assets) at a given point in time (i.e., as at a specific date). During the early era of financial reporting standard setting, throughout the nineteenth century and first half of the twentieth century, the emphasis of legislation was almost entirely on the statement of financial position but by the mid‐twentieth century owners were asking for more and more information about operating performance, leading to presentations of an increasingly complex income statement (or the profit and loss).

Since the two financial statements, are linked together because of double entry bookkeeping conventions, they cannot easily serve differing objectives. The stock markets look primarily at earnings expectations, which are largely based on historic performance, as measured by the income statement. If earnings measurement drives financial reporting, this means ...