Structure of Financial Statement

Structure of Financial Statement

Structure of financial statements contains the following

1.    Component of financial statements.

2.    Element of financial statements.

3.    Block or section of financial statements.

4.    Items of Financial statements.

1.   Component of Financial statements

Financial statements include the following statements. These statements are known as component of financial statements.

1.    Statement of Financial position.

2.    Statement of comprehensive income.

3.    Statement of changes in equity.

4.    Statement of cash flow.

5.    Notes to the financial statements.

Statement of financial position shows the financial position or strength of the entity, while statement of comprehensive income tells about the financial performance of the entity. Statement of changes in equity shows changes in the equity account of the entity. Statement of cash flows informs about the cash inflow and flow occurred during the year.

Notes to the accounts provide further details of amount appearing on the face of financial statements.

 2.   Elements of Financial Statement

Financial statement contains five types of elements i.e. Asset, liabilities and equity belongs to statement of financial position, while income and expenses are part of statement of comprehensive income.

·         Assets      (Financial position)

·         Liabilities  (Financial Position)

·         Equity      (Financial Position)

·         Expenses  (Comprehensive Income)

·         Incomes   (Comprehensive Income)

3.   Blocks or Section of Financial Statements

Above mentioned element may be further divided into following section or blocks.

·         Assets      (Non Current & Current Assets)

·         Liabilities  (Non Current & Current Liabilities)

·         Equity      (Equity & Reserves)

·         Expenses  ( Cost of Sales, Administrative expenses, Financial Expenses )

·         Incomes   (Income & other Incomes)

4.   Items of Financial Statement

Different blocks of financial statement are further divided into items of financial statement.

Non Current Asset (Plant, Vehicles, furniture)

Current Asset (Stock, Receivable, Cash)

Non Current Liabilities (loan, Debentures)

Administrative Expenses (Salaries, Rent etc)

The above structure of financial statement has been explained below with the help of a table.

Component	Element	Blocks	Item
Financial position	Asset	Non Current Asset	Furniture
			Plant
			Vehicles

Statements of Financial position 31 December, 2016. (Component)

Liabilities                 (element)	Assets                  (element)
Non current Liabilities (block)	Non Current Asset (Block)
Loan                         (item)	Plant                     (item)
Finance lease             (item)	Machinery              (Item)