馃攳
Financial Statements - Lecture 9 - The notes to the financial statements - IFRS & ASPE - YouTube
Channel: Else Grech Accounting
[10]
hi else here and in this video we'll be
[14]
exploring the notes to the financial
[15]
statements the notes to the financial
[17]
statements are not considered a
[19]
financial statement per se but they are
[21]
an important and integral part of the
[23]
financial statements this is true for
[25]
public corporations who must use IFRS
[27]
and private corporations who choose to
[29]
use IFRS in addition private
[32]
corporations can choose to follow a
[33]
speii if they do they produce a slightly
[36]
different set of financial statements
[37]
companies following a speii are also
[40]
required to include notes to the
[41]
financial statements in these videos
[44]
I'll be using a public corporation to
[46]
explain what the notes of the financial
[48]
statements include but this video will
[50]
apply to companies following IFRS or as
[53]
B in order to demonstrate the notes of
[55]
the financial statements I've decided to
[57]
use Dollarama inks annual report for the
[60]
year ended February 2nd 2014 if you
[63]
download the annual report you'll see
[65]
that at the bottom of each of the four
[66]
major financial statements there is the
[69]
following statement the accompanying
[71]
notes are an integral part of these
[72]
consolidated financial statements this
[75]
is a warning to users a failure to read
[78]
the notes to the financial statements
[80]
will result in incomplete knowledge of
[81]
the company's financial health the notes
[84]
supplement the financial statements
[85]
without them it's not possible to fully
[88]
understand the financial condition of
[90]
the company the notes should include any
[92]
information that will improve the users
[94]
understanding of the financial
[96]
statements although there are some
[98]
choices as to what the notes should
[100]
include there are three basic types of
[102]
notes that have to be included first is
[105]
a statement of compliance indicating the
[107]
use of either IFRS or ASPI since
[109]
Dollarama is a public corporation their
[111]
compliance statement references the use
[113]
of IFRS this note is called the basis of
[116]
preparation note and it must be included
[119]
in every financial statements whether
[120]
using IFRS or Osby next is a summary of
[124]
significant accounting policies and
[126]
rules used to prepare the financial
[127]
statements again this is required
[130]
whether a company follows IFRS or a Spee
[133]
this note will include such things as
[134]
the basis of measurement for specific
[136]
financial assets and liabilities how
[138]
property plant and equipment is valued
[140]
plus many other items for Dollarama the
[143]
summary of significant accounting
[144]
policies goes on for nine pages this
[147]
indicates the importance of this section
[149]
of the notes to the financial statements
[151]
the third type of note disclosure is the
[154]
relevant information to aid a user's
[156]
understanding of individual line items
[158]
reported on the face of the four
[159]
financial statements for instance in
[162]
dollar Amma's notes note 7 gives details
[165]
of the property and equipment that is
[166]
listed under non current assets on the
[169]
statement of financial position each
[171]
line item from the financial statements
[173]
that does have a note is cross-reference
[175]
to that note in order to help users
[177]
locate the relevant information there
[179]
are other notes that may also be
[181]
included such as any disclosures that
[183]
are required by specific standards or
[185]
notes about items that are not listed on
[187]
the statements themselves such as
[189]
exposure to significant risks although
[191]
some notes are specifically required
[193]
IFRS and ASCII have a more general
[195]
requirement that notes be provided for
[198]
anything that would allow a user to
[200]
better understand the company's
[201]
financial health let's check your
[203]
understanding of the notes to the
[204]
financial statements on April 9th 2014
[209]
Dollarama announced a 14% increase in
[212]
their quarterly dividend this
[213]
announcement was made after the February
[215]
2nd financial statement date where if at
[218]
all would this information be reported
[225]
even though the increase in the dividend
[227]
was announced after the date of the
[229]
financial statements it is a subsequent
[231]
event that is important for the users
[232]
should know in order to better
[234]
understand the financial health of
[235]
Dollarama as such it's not included in
[238]
the face of any of the financial
[239]
statements but it must be included in
[241]
the notes of the financial statements
[242]
the purpose of the notes is clear notes
[245]
explain and expand on the information
[248]
provided on the face of the financial
[249]
statements companies are responsible for
[251]
fully disclosing all relevant
[253]
information for decision making and the
[255]
notes are a critical part of this
[256]
responsibility the notes of the
[258]
financial statements include both
[259]
qualitative and quantitative information
[261]
whatever is required to improve users
[264]
understanding in
[266]
act the notes includes so much
[267]
information that they make up the
[269]
majority of the financial report for
[270]
instance in dollar Amma's annual report
[273]
there are only four pages dedicated to
[275]
the financial statements themselves but
[277]
there are 25 pages of notes investors
[281]
lenders and creditors use the notes to
[283]
increase their understanding of the
[284]
content of the financial statements so
[285]
they can better understand the health of
[287]
the company we have now completed our
[290]
lectures on the financial statements but
[292]
likely you a student of accounting have
[294]
an even more important question what are
[297]
the steps you should use to attack a
[298]
financial statement question on a test
[300]
or an exam and that is the subject of
[303]
our next video
Most Recent Videos:
You can go back to the homepage right here: Homepage