FRS 1(Cash Flow Statements) & FRS 3 (Reporting Financial Performance)

federal official 1: gold FLOW STATEMENTS AMENDMENT OF federal official 1 CASH FLOW STATEMENT substructure gold menstruate statements are intended to complement the other than primary financial statements. While information about w vitamin Aereum and other gains or losses is obviously important in assessing the progress of a company, it is equally important to gain an mother wit of how those gains and losses, and other transactions of the company, have been reflected in the property settles (Chopping & Stephens 2003). federal official 1 (revised) Cash lean statements came out in 1996 as a replacement to FRS 1 Cash flow statement. The release of FRS 1 (revised) lends itself to a capability examination - the reasons for the issue of the revised standard. REASONS FOR REVISING FRS 1 FRED 10 interchange flow statements, the Financial Reporting characterisation Draft that preceded FRS 1 (revised), outlined several review articles of FRS 1 (Business parentage Premie r 1996): 1. The main criticism was that the description of exchange and currency equivalents was too restrictive. Cash was non a problem, but because treasury heed vary among entities, the definition of coin equivalents had presented difficulty. 2. The second criticism of FRS 1 was that the final balance on the cash flow statement was of little relevance in assessing the liquid state of the entity.

By focusing on the movement in cash and cash equivalents, other balances such(prenominal) as movements on loans and semipermanent investments were ignored. 3. on that point was also a problem with the trend investing activities on the formula of the cash flow statement. Investing a ctivities included the cash effects of the ! corrupt and sale of both long-term investments such as heady assets, and short-term investments such as short-term deposits. 4. Finally, there was a general concern that the cash flow statement was not reflecting the more important or applicable aspects of cash... If you want to spoil a full essay, order it on our website: OrderEssay.net

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