IFRS for SMEs illustrative consolidated financial statements
IFRS for SMEs illustrative consolidated financial statements
This publication has been prepared for illustrative purposes only and does not constitute accounting or other professional advice, nor is it a substitute for reference to the source standard, interpretations and legislative requirements.
PKF International Limited accepts no responsibility for losses occasioned by any party acting or not acting as a result of this material. It is produced for use by PKF International Limited network member firms only and should not be circulated outside the network.
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IFRS FOR SMES ILLUSTRATIVE FINANCIAL STATEMENTS
Table of Contents
Introduction
3
Consolidated statement of comprehensive income and retained earnings for the year
ended 31 December 20XX
6
(Alternative 1 - Illustrating the classification of expenses by function)
6
Consolidated statement of comprehensive income for the year ended 31 December 20XX
7
(Alternative 2 - Illustrating the classification of expenses by nature and incorporating other comprehensive income)
7
Consolidated statement of financial position at 31 December 20XX
8
Consolidated statement of changes in equity at 31 December 20XX
9
Consolidated statement of cash flows for the year ended 31 December 20XX
10
Notes to the financial statements for the year ended 31 December 20XX
12
1. Basis of preparation and accounting policies
13
2. Information about key sources of estimation uncertainty and judgements
24
3. Restriction on payment of dividend
24
4. Changes in accounting policies
24
5. Revenue
25
6. Other income
25
7. Finance costs
25
8. Profit before tax
26
9. Income tax expense
26
10. Other comprehensive income
28
11. Cash and cash equivalents
28
12. Trade and other receivables
28
13. Inventories
28
14. Investment in associate
29
15. Property, plant and equipment
30
16. Investment property
31
17. Intangible assets
32
18. Deferred tax
33
19. Bank overdraft and loan
34
20. Trade payables
34
21. Provision
34
22. Employee benefit obligation-long-service awards
35
23. Obligations under finance leases
36
24. Commitments under operating leases
37
25. Disposal of assets
37
26. Share capital
37
27. Contingent liabilities
38
28. Events after the end of the reporting period
38
29. Related party transactions
39
30. Approval of financial statements
39
Appendix A: IFRS for SMEs disclosure checklist
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IFRS FOR SMES ILLUSTRATIVE FINANCIAL STATEMENTS
1
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IFRS FOR SMES ILLUSTRATIVE FINANCIAL STATEMENTS
Introduction
These illustrative financial statements present the consolidated financial statements of Universal Reporting (Pty) Ltd, an imaginary group consisting of a holding company, a wholly-owned subsidiary and an investment in an associate, applying the International Financial Reporting Standard for Small and Medium-Sized Entities (IFRS for SMEs) for the year ended 31 December 20XX. The IFRS for SMEs on which the illustrative financial statements have been prepared was issued in May 2015 and becomes effective for periods beginning on or after 1 January 2017.
They are prepared on the assumption that the group is not a first time adopter. Therefore, the specific disclosure requirements set out in Section 35 are not included.
The disclosures illustrated are compliant with the IFRS for SMEs. Where an accounting standard allows a choice between different measurement models, the financial statements illustrates and applies a single measurement model in accordance with the applicable section of the IFRS for SMEs. No audit report has been included as this will vary between companies based on the circumstances and local legislative requirements in each case. Furthermore, individual jurisdictions may impose additional restrictions or requirements which have not been reflected.
Commentary notes have been provided in some cases to further explain the illustrated disclosures and to set out additional disclosure requirements not specifically illustrated in the illustrative financial statements.
Source references for the illustrative disclosure have also been included in the right hand margin of the financial statements and commentary notes. Examples of source references used are:
11.48 = Paragraph 48 of Section 11 of the IFRS for SMEs.
The disclosures required by the following sections have not been included:
? Section 12 Other Financial Instruments Issues
? Section 15 Investments in Joint Ventures
? Section 19 Business Combinations (to the extent that it relates to businesses acquired in the reporting period)
? Section 24 Government Grants
? Section 26 Share-based Payment
? Section 31 Hyperinflation
? Section 34 Specialised Activities
While every care has been taken in its preparation, these illustrative financial statements only provide a general guide and are not a substitute for professional advice.
Section 3 Financial Statement Presentation of the IFRS for SMEs defines a complete set of financial statements and prescribes general standards of financial statement presentation. Sections 4-8 prescribe the format and content of the individual financial statements and notes. Other sections of the IFRS for SMEs establish additional presentation and disclosure requirements. The financial statements set out below illustrate how those presentation and disclosure requirements might be met by a typical small or medium-sized entity. Of course, each entity will need to consider the content, sequencing and format of presentation in that entity's particular circumstances. These illustrative financial statements should not be regarded as a template appropriate for all entities.
The illustrative statement of financial position presents current assets followed by non-current assets, and presents current liabilities followed by non-current liabilities and then by equity (i.e. most liquid items first). In some jurisdictions, the sequencing is typically reversed (i.e. most liquid items last), and that is also permitted by the IFRS for SMEs. Consistently with paragraph 3.22 of the IFRS for SMEs, an entity may use titles for the financial statements other than those used in these illustrations.
IFRS FOR SMES ILLUSTRATIVE FINANCIAL STATEMENTS
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