Yakub02
Banned
Effective communication in financial statements is also supported by considering the following principles:
a) entity-specific information is more useful than standardized descriptions, sometimes referred to as ‘boilerplate’; and b) duplication of information in different parts of the financial statement is usually unnecessary and can make financial statements less understandable.
Classification a) Classification is the sorting of assets, liabilities, equity, income or expenses on the basis of shared characteristics for presentation and disclosure purposes.
Such characteristics include—but are not limited to—the nature of the item, its role (or function) within the business activities conducted by the entity, and how it is measured.
Classifying dissimilar assets, liabilities, equity, income or expenses together can obscure relevant information, reduce understandability and comparability and may not provide a faithful representation of what it purports to represent. -
Offsetting Offsetting occurs when an entity recognizes and measures both an asset and liability as separate units of account, but groups them into a single net amount in the statement of financial position. Offsetting classifies dissimilar items together and therefore is generally not appropriate. -
The Classification of equity is to provide useful information, it may be necessary to classify equity claims separately if those equity claims have different characteristics
a) entity-specific information is more useful than standardized descriptions, sometimes referred to as ‘boilerplate’; and b) duplication of information in different parts of the financial statement is usually unnecessary and can make financial statements less understandable.
Classification a) Classification is the sorting of assets, liabilities, equity, income or expenses on the basis of shared characteristics for presentation and disclosure purposes.
Such characteristics include—but are not limited to—the nature of the item, its role (or function) within the business activities conducted by the entity, and how it is measured.
Classifying dissimilar assets, liabilities, equity, income or expenses together can obscure relevant information, reduce understandability and comparability and may not provide a faithful representation of what it purports to represent. -
Offsetting Offsetting occurs when an entity recognizes and measures both an asset and liability as separate units of account, but groups them into a single net amount in the statement of financial position. Offsetting classifies dissimilar items together and therefore is generally not appropriate. -
The Classification of equity is to provide useful information, it may be necessary to classify equity claims separately if those equity claims have different characteristics