According to IAS – International Accounting Standards, the financial statements are a structured representation of the financial position and financial performance of an entity. The objective of general purpose financial statements is to provide information about the financial position, financial performance and cash flows of an entity that is useful to a wide range of users in making economic decisions. Financial statements also show the results of management’s stewardship of the resources entrusted to it. To meet this objective, financial statements provide information about an entity’s:
(d) income and expenses, including gains and losses;
(e) other changes in equity; and
(f) cash flows.
This information, along with other information in the notes, assists users of financial statements in predicting the entity’s future cash flows and, in particular, their timing and certainty.
A complete set of financial statements comprises:
(a) a balance sheet;
(b) an income statement;
(c) a statement of changes in equity showing either:
(i) all changes in equity; or
(ii) changes in equity other than those arising from transactions with equity holders acting in their capacity as equity holders;
(d) a cash-flow statement; and
(e) notes, comprising a summary of significant accounting policies and other explanatory notes.