Assignment Of Financial

Accounting
(Assignment No.1)

Submitted To:

Sir Ejaz Beig

Submitted By:
Muhammad Badar

Shahab

Roll No. 5041

MBA-1st
Section-A

National Textile University

Financial Statement
A financial statement (or financial report) is a formal record of the financial
activities of a business, person, or other entity.

Components of Financial Statements:

A complete set of financial statements should include these four
components:

Balance sheet a statement of financial position at the end of the period

Income statement a statement of comprehensive income for the period.
A statement of Changes in equity for the period
A statement of cash flows for the period
Notes to the financial statements, comprising a summary of accounting

policies and other explanatory notes

Balance Sheet:
A financial statement that summarizes a company's assets, liabilities
and shareholders' equity at a specific point in time. These three balance
sheet segments give investors an idea as to what the company owns
and owes, as well as the amount invested by the shareholders.
The balance sheet must follow the following formula:
Assets = Liabilities + Shareholders' Equity

Income Statement:
Comprehensive income for a period includes profit or loss for that
period plus other comprehensive income recognized in that period.
All items of income and expense recognized in a period must be included in
profit or loss unless a Standard or an Interpretation requires otherwise. Some
IFRSs require or permit that some components to be excluded from profit or
loss and instead to be included in other comprehensive income.
In short A financial statement that measures a company's financial
performance over a specific accounting period. Financial performance is
assessed by giving a summary of how the business incurs its revenues and
expenses through both operating and non-operating activities. It also shows
the net profit or loss incurred over a specific accounting period, typically over
a fiscal quarter or year.

Also known as the "profit and loss statement" or "statement of revenue and
expense".

Statement Of Changes In Equity:

Statement of changes in equity requires an entity to
present a statement of changes in equity as a separate component of the
financial statements. The statement must show:

total comprehensive income for the period, showing separately amounts

attributable to owners of the parent and to non-controlling interests
the effects of retrospective application, when applicable, for each
component
reconciliations between the carrying amounts at the beginning and the
end of the period for each component of equity, separately disclosing:
profit or loss
each item of other comprehensive income
transactions with owners, showing separately contributions by and
distributions to owners and changes in ownership interests in
subsidiaries that do not result in a loss of control

Statement Of Cash Flows:

Statement that provides information about an entity's cash
receipts and cash disbursements for a period as they apply to operating,
investing, and financing activities. The statement is required in the annual
report. Cash flows from operating activities comprise the first section of the
statement. These apply to transactions impacting net income. Examples of
cash inflows from operating activities are cash sales, customer collections on
account, interest income, and dividend income. Examples of cash outflows
from operating activities are paying suppliers of merchandise, paying
suppliers of operating expense items, employee wages, interest expense,
and taxes. Investing activities relate to the purchase or sale of equity and
debt securities of other entities and the acquisition or sale of property, plant,
and equipment. The financing section appears last in the statement of cash
flows. Financing activities relate to obtaining equity capital, dividend
payments to stockholders, debt issuance, and repayment of bonds.
When a cash receipt or cash payment is for more than one activity,
classification is based on the activity that is the prime reason for that cash

flow. For instance, the purchase and sale of equipment to be used by the
company is often deemed as an investing purpose.

Notes to the Financial Statements:

Present information about the basis of
preparation of the financial statements and the specific accounting policies
used disclose any information required by IFRSs that is not presented
elsewhere in the financial statements and provide additional information that
is not presented elsewhere in the financial statements but is relevant to an
understanding of any of them

suggests that the notes should normally be presented in the following

order:
a statement of compliance with IFRSs
a summary of significant accounting policies applied, including: [IAS
1.117]
the measurement basis (or bases) used in preparing the financial
statements
the other accounting policies used that are relevant to an understanding
of the financial statements

supporting information for items presented on the face of the statement of

financial position (balance sheet), statement of comprehensive income (and
income statement, if presented), statement of changes in equity and
statement of cash flows, in the order in which each statement and each line
item is presented
other disclosures, including:

contingent liabilities and unrecognized contractual commitments

non-financial disclosures, such as the entity's financial risk management
objectives and policies

Major Stakeholders of the financial

statements

Stakeholder:
Person, group, or organization that has direct or indirect stake in
an organization because it can affect or be affected by
the organization's actions, objectives, and policies. Key stakeholders in
a business organization
include creditors, customers, directors, employees, government(and
its agencies), owners (shareholders), suppliers, unions, and
the community from which the business draws its resources. Although stakeholding is usually self-legitimizing (those who judge themselves to be
stakeholders are de facto so), all stakeholders are not equal and different
stakeholders are entitled to different considerations. For example,
a firm's customers are entitled to fair trading practices but they are not
entitled to the same consideration as the firm's employees. See
also corporate governance.

The main Stakeholders of the financial statements are:

There are many stakeholder of a balance sheet but main stakeholders are
given below:

Owners:
Shareholders
Management
Suppliers
Customers
Employees
Government
Lenders
Financial institutions (investors)
Society and community

Owners: Entity that possesses the exclusive right to hold, use, benefit-from,
enjoy, convey, transfer, and otherwise dispose of an asset or property.

Shareholders: Individual, group, or organization that holds one or more

shares in a firm, and in whose name the share certificate is issued. It is legal
for a firm to have only one shareholder. Also called stockholder.
Suppliers: External entity that supplies relatively common, off the shelf, or
standard goods or services, as opposed to a contractor or subcontractor who
commonly adds specialized input to deliverables. Also called vendor.
Lenders: Entity that advances cash to a borrower for a stated period and for
a fixed or variable rate of interest, with or without a security other than the
borrower's signatures.
Financial institutions: Private (shareholder-owned) or public (governmentowned) organizations that, broadly speaking, act as A channel between
savers and borrowers of funds (suppliers and consumers of capital).

Attachments:
I attached the financial statement of Riaz Enterprises Ltd.