Professional Documents
Culture Documents
BALANCE SHEET
INTRODUCTION TO BALANCE SHEET
The accounting balance sheet is one of the major financial statements
used by accountants and business owners. The balance sheet is also
referred to as the statement of financial position.
The balance sheet presents a company's financial position at the end of
a specified date. Some describe the balance sheet as a "snapshot" of
the company's financial position at a point (a moment or an instant) in
time. For example, the amounts reported on a balance sheet dated
December 31, 2015 reflect that instant when all the transactions
through December 31 have been recorded.
EXPLANATION
Although the expression of true and fair view is not strictly defined in
the accounting literature, we may derive the following general
conclusions as to its meaning:
True suggests that the financial statements are factually correct and
have been prepared according to applicable reporting framework such
as the IFRS and they do not contain any material misstatements that
may mislead the users. Misstatements may result from material errors
or omissions of transactions & balances in the financial statements.
Fair implies that the financial statements present the information
faithfully without any element of bias and they reflect the economic
substance of transactions rather than just their legal form.
EXPECTED APPROACH
The statement highlights what is expected by the FRC as a result of the
clarifications outlined in respect of the true and fair requirement:
to always stand back and ensure that the accounts as a whole do give
a true and fair view;
to provide additional disclosures when compliance with an accounting
standard is insufficient to present a true and fair view;
to use the true and fair override where compliance with the standards
does not result in the presentation of a true and fair view; and
to ensure that the consideration they give to these matters is evident
in their deliberations and documentation.
Thank You