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Topic 2

Financial Highlights
Review of the year

Chairmans Review
Chief Executives review
Operations Review
Financial Review
Other reviews

Directors Information
Corporate Governance

Information
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Directors Report
Statement of Directors

Responsibilities
Auditors Report
Financial Statements
Accounting Policies
Information re subsidiary companies
(where relevant)
Investors Information
Notice of AGM
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Reading:

Business Accounting 2
(11thEd)Chs:4,12,13,14
Frank Wood & Alan Sangster

Companies Acts 1963 2005

Separate legal entity


Ownership and management separated

Liability limited to value of shares

Classes of shares
Ordinary
Preference

Distributable Profits: Dividends


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Enforcement

in Ireland

Companies Registration Office (CRO)

www.cro.ie
Office of director of corporate
enforcement (ODCE) www.odce.ie

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Companies Act 1963


Listed groups must use International Financial

Reporting Standards (IFRS) to prepare accounts


All other companies choose between
Companies legislation and local Accounting Standards
(Irish GAAP) and
IFRS

Rules and Guidelines accounting


standards
International Financial Reporting Standards

(IFRS)
Local Accounting standards (being phased out)

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Income Statement / Profit & Loss Account


Statement of Financial Position (Balance
Sheet)
Cash Flow Statement
Statement of Changes in Equity (SOCE)
Accounting policies and other explanatory
notes

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Sets of rules and guidelines established by


the accounting profession
Use require by the law

Also, some companies legislation requirements

in FS

Role of Standards
When to recognise and de-recognise items in

Financial Statements
How to present a particular transaction
How to value and measure items
What to disclose about the issue/ item

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Assets

Resources held by the organisation


a probable future benefit exists
organisation has exclusive right to control the

benefit
benefit must arise from some past transaction
or event
must be capable of measurement in monetary
terms

Current

Non-current
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Liabilities
Legal obligation to transfer assets or
provide services to another entity which
has arisen from past transactions or
events
Current / Long term (Non-current)

Capital (Owner's Equity)


Amounts (money or goods) invested in
the organisation by owner(s).
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Revenue
Amounts of money earned by the
organisation from its operations (i.e.
the supply of goods or services) in a
particular period.

Expenses
Costs of goods and services incurred
in earning revenue.
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Income Statement
Shows the performance of the organisation
by matching the revenue earned with the
expenses incurred in the period
Balance Sheet
Shows the organisation's resources and the
source of those resources by listing the
assets, liabilities and capital at a particular
date
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Assets

= Capital + Liabilities

Resources:
What they are
them

Who supplied

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Ordinary shares
Preference

Participating
Irredeemable
Redeemable (like loans)

All

shares are shown at nominal


value (book value) in the accounts
This is not their market value but an

arbitrary amount required by law

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Part of owners equity


Different types of accumulated funds
Does not necessarily equate to cash
Can be a gain that is not yet realised, i.e. turned into

cash
Might be an allocation out of profits

Examples:

Share Premium
Revaluation Reserve
Retained Earnings
Capital Reserve
Plant replacement reserve

Show all reserve movements in the year in SOCE


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Purpose part of return to shareholders


Ordinary
Preference
Recording in Financial Statements
Paid
Accrued (due but not yet paid)

Presentation in FS
Shown in SOCE only
Accruals (amounts as yet unpaid) in Balance

Sheet as a Current Liability


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