Objective and scope of financial statements
The objective of financial statements is to provide information about an entity's assets, liabilities, equity, income and expenses that is useful to financial statements users in assessing the prospects for future net cash inflows to the entity and in assessing management's stewardship of the entity's resources. [3.2]
This information is provided in the statement of financial position and the statement(s) of financial performance as well as in other statements and notes. [3.3]
Reporting period
Financial statements are prepared for a specified period of time and provide comparative information and under certain circumstances forward-looking information. [3.4-3.6]
Perspective adopted in financial statements and going concern assumption
Financial statements provide information about transactions and other events viewed from the perspective of the reporting entity as a whole and are normally prepared on the assumption that the reporting entity is a going concern and will continue in operation for the foreseeable future. [3.8-3.9]
The reporting entity
A reporting entity is an entity that is required, or chooses, to prepare financial statements. It can be a single entity or a portion of an entity or can comprise more than one entity. A reporting entity is not necessarily a legal entity. [3.10]
Determining the appropriate boundary of a reporting entity is driven by the information needs of the primary users of the reporting entity’s financial statements. [3.13-3.14]
Consolidated and unconsolidated financial statements
Generally, consolidated financial statements are more likely to provide useful information to users of financial statements than unconsolidated financial statements. [3.18]
