Understanding General Purpose Financial Statements and Reporting

School: Western Sydney University - Course: CAS 200109 - Subject: Accounting

ACCT3007 Corporate Accounting Systems Autumn Semester Week 1 Tutorial Question Question 1 What is a general purpose financial statement? A general-purpose financial statement is a legal requirement that a corporate tax entity must comply with under the IASB/AASB Conceptual Framework and accounting standards. It is a financial statement which should meet the needs of users who are unable to prepare reports to satisfy their information needs. Question 2 What is a reporting entity, and what factors would you consider in determining whether an entity is a reporting entity? 1

Question 3 For the situation identified below, consider whether the entity is required by theAccounting Standard (Appendix to AASB 1053)to prepare financial statements and, if so, whether it is a 'reporting entity'. House Cleaning Service Ltd is a small proprietary company. The shareholders are Mr. and Mrs. Luke, who also manage the company's day-to-day operations. The company's banker, Investment Bank, receive monthly management accounts, budgeted cash-flow information, and the year-end statutory accounts. Question 4 For the situation identified below, consider whether the entity is required by theCorporation Actto prepare financial statements and, if so, whether it is a 'reporting entity'. A-Trust is a private trust wherein up to a maximum of 25 members may deposit amounts to be invested in bule-chips equities. Members' funds consist of units of $1 each. Quarterly reports are produced, which disclose the market value of the trust assets and the value of each member's entitlements.