Our Recommendations :-
Follow FB Page Facebook

IFRS Elements of Financial Statements of Credit Institutions

IFRS Elements of Financial Statements of Credit Institutions: These include classification errors among the real accounts in the balance sheet. They have no effect on the income statement and therefore do not require any restatement of retained earnings. When comparative financial statements are prepared the classification errors of prior periods should be corrected for each year presented.

IFRS Elements of Financial Statements of Credit Institutions: INCOME STATEMENT ERRORS

These include classification errors among the nominal accounts in the income statement. They have not effect on net income and therefore do not require any restatement of retained earnings. When comparative financial statements are prepared the classification errors of prior periods should be corrected for each year presented.

IFRS Elements of Financial Statements of Credit Institutions

IFRS Elements of Financial Statements of Credit Institutions

IFRS Elements of Financial Statements of Credit Institutions: BALANCE SHEET AND INCOME STATEMENT EFFECTS There are two types of errors involving both the income statement and the balance sheet. Counterbalancing errors will be offset over two accounting periods. Non counter balancing errors take more than two periods to offset.

Important Note – Preparing for IFRS?
CAKART provides Indias top faculty each subject video classes and lectures – online & in Pen Drive/ DVD – at very cost effective rates. Get video classes from CAKART.in. Quality is much better than local tuition, so results are much better.
Watch Sample Video Now by clicking on the link(s) below – 
For any questions Request A Call Back  

Counterbalancing Errors We first need to determine if the books are closed for the current year.

(1) If the books are closed for the current year:

a) No entry is necessary if the error has already counterbalanced.

b) An entry must be made to retained earnings if the error has not counterbalanced.

(2) If the books are not closed for the current year:

a) If the company is in the second year and the error has already counterbalanced, an entry is necessary to correct the current period and adjusted beginning retained earnings.

b) If the error has not counterbalanced, an entry is necessary to adjusted beginning retained earnings and correct the current period. Restatement of the financial statements is necessary under all conditions.

Important Note – Preparing for IFRS?
CAKART provides Indias top faculty each subject video classes and lectures – online & in Pen Drive/ DVD – at very cost effective rates. Get video classes from CAKART.in. Quality is much better than local tuition, so results are much better.
Watch Sample Video Now by clicking on the link(s) below – 
For any questions Request A Call Back  

B. Non counter balancing Errors It makes no difference whether the books are closed or still open, a correcting journal entry is necessary.

Information related to its asserts

IFRS Elements of Financial Statements of Credit Institutions : IFRS Components Of Financial Statements  are Assets, Liabilities, Owner’s Equity, Revenues, Expenses, Gains, Losses

Assets are :

  1. probable future economic benefits
    –> obtained or controlled by an entity
    –> as a result of past transactions or events.
  2.   Essential characteristics of assets
    Probable future economics benefits
    Obtained or controlled by an entity
    Result of past transactions or events.Common characteristic of all assets
    –> is service potential or future economic benefits

Liabilities are 
–> probable future sacrifices of economic benefits
–> arising from present obligations of an entity
–> to transfer assets or provide services to other entities in the future
–> as a result of past transactions or events.

Essential characteristics of liabilities
Probable future sacrifices of economic benefits
Present obligations to transfer assets or provide services in the future
Result of past transactions or events.

Equity (or net assets) is 
–> residual interests in the assets of an entity
–> that remains after deducting its liabilities.

Essential characteristics of equity
Equity is residual interests in the assets after deducting liabilities
Equity = Assets – Liabilities

Revenues are 
–> inflows of assets of an entity or
–> settlements of its liabilities (or a combination of both)
–> from delivering or producing goods, rendering services.

Essential characteristics of revenues
Inflows of assets or settlements of liabilities
From delivering goods or rendering services

 Expenses are 
–> outflows or other using up of assets or
–> incurrences of liabilities (or a combination of both) |
–> from delivering or producing goods, rendering services.

Essential characteristics of expenses
Outflows of assets or incurrences of liabilities
from delivering goods or rendering services

Gains are 
–> increases in equity (net assets)
–> except those from revenues or investments by owners.

Essential characteristics of gains
Increases in equity from transactions or events
Except those that result from revenues or investments by owners.

Losses are 
–> decreases in equity (net assets)
–> except those from expenses or distributions to owners.
Essential characteristics of losses
Decreases in equity from transactions or events
Except those that result from expenses or distributions to owners.

Presentation and disclosure

A bank’s income statement should group income and expenses by nature. [IAS 30.9]

A bank’s income statement or notes should report the following specific amounts: [IAS 30.10]

  • interest income
  • interest expense
  • dividend income
  • fee and commission income
  • fee and commission expense
  • net gains/losses from securities dealing
  • net gains/losses from investment securities
  • net gains/losses from foreign currency dealing
  • other operating income
  • loan losses
  • general administrative expenses
  • other operating expenses.

A bank’s balance sheet should group assets and liabilities by nature and list them in liquidity sequence. [IAS 30.18] IAS 30.19 sets out the specific line items requiring disclosure.

IAS 30.13 and IAS 30.23 include guidelines for the limited circumstances in which income and expense items or asset and liability items are offset.

A bank must disclose the fair values of each class of its financial assets and financial liabilities as required by IAS 32 and IAS 39. [IAS 30.24]

Disclosures are also required about:

  • specific contingencies and commitments (including off-balance sheet items) requiring disclosure [IAS 30.26]
  • specified disclosures for the maturity of assets and liabilities [IAS 30.30]
  • concentrations of assets, liabilities and off-balance sheet items [IAS 30.40]
  • losses on loans and advances [IAS 30.43]
  • general banking risks [IAS 30.50]
  • assets pledged as security [IAS 30.53].

IFRS Elements of Financial Statements of Credit Institutions

For other details you can follow our official website cakart.in you can get all your required information from cakart blog. Cakart is providing the quality items for your study and leading you to success.  You want to know about other exams you can get in cakart, free books, video courses etc. All your need related to exams end her. CAKART.IN

IFRS Elements of Financial Statements of Credit Institutions

Cakart.in provides India’s top IFRS faculty video classes – online & in Pen Drive/ DVD – at very cost effective rates. Get IFRS Video classes from www.cakart.in  to do a great preparation for primary Student.

Watch IFRS sample video lectures Here
Watch  IFRS  sample lecture books  Here
Watch IFRS free downloads  Here

About Author: cakart

Leave a Reply

Your email address will not be published. Required fields are marked *

Chat with a counsellor
SIGN UP