Financial Statements (AASB1039_08-08_COMPdec21_01-22)

A concise financial report shall include the following financial statements:

(a) a statement of profit or loss and other comprehensive income for the annual reporting period;

(b) a statement of financial position as at the end of the annual reporting period;

(c) a statement of cash flows for the annual reporting period; and

(d) a statement of changes in equity for the annual reporting period.

In accordance with paragraph 10A of AASB 101 Presentation of Financial Statements, an entity may present all items of income and expense recognised in a period in a single statement of profit or loss and other comprehensive income or present the profit or loss section in a separate statement of profit or loss.

Each financial statement shall be presented as it is in the financial report, in accordance with other Accounting Standards, except for the omission of cross-references to notes to the financial statements in the financial report.

All the notes to the financial statements required by other Accounting Standards are not required in the concise financial report. For example, this Standard does not require an entity that uses the direct method in the statement of cash flows to provide a reconciliation of cash flows arising from operating activities to profit or loss. However, information required in some notes by other Accounting Standards is required when specified in this Standard.

It is recommended that the financial statements in the concise financial report be cross-referenced, where appropriate, to disclosures included in the concise financial report.

When the entity is a parent and only the consolidated financial statements are presented, the lack of financial statements for the parent would not be regarded as contravening paragraph 21.

The financial statements of entities other than listed companies shall be accompanied by discussion and analysis to assist the understanding of members.

Listed companies are not required by this Standard to provide discussion and analysis in the concise financial report because, unlike other entities, they are required by section 299A of the Corporations Act to provide an operational and financial report in the Directors’ Report that is part of the concise report. Paragraph 24 only exempts listed companies from the statutory obligation to provide discussion and analysis of the financial statements. It does not prohibit a listed company from providing any discussion and analysis that it considers would assist a reader to understand the financial statements in the concise financial report.

The information reported in the financial statements will be enhanced by a discussion and analysis of the principal factors affecting the financial performance, financial position and financing and investing activities of the entity. The extent of the discussion and analysis provided will vary from entity to entity, and from year to year, as is necessary in the circumstances to help compensate for the brevity of the concise financial report compared with the financial report.

In most situations, the content of the discussion and analysis would cover at least the following areas:

(a) in relation to the statement of profit or loss and other comprehensive income:

(i) trends in revenues;

(ii) the effects of significant economic or other events on the operations of the entity;

(iii) the main influences on costs of operations; and

(iv) measures of financial performance such as return on sales, return on assets and return on equity;

(b) in relation to the statement of financial position:

(i) changes in the composition of assets;

(ii) the relationship between debt and equity; and

(iii) significant movements in assets, liabilities and equity items;

(c) in relation to the statement of cash flows:

(i) changes in cash flows from operations;

(ii) financing of capital expenditure programs; and

(iii) servicing and repayment of borrowings; and

(d) in relation to the statement of changes in equity:

(i) changes in the composition of the components of equity; and

(ii) causes of significant changes in subscribed capital, such as rights issues, share buy-backs or capital reductions.