Conceptual Framework

1. backward looking (stewardship)

2. forward looking (economic decision making)

objective financial statements:

provide financial infos about the reporting entity that is useful to present stakeholders in making decisions about providing resources to the entity

1. balance sheet

2. Income Statement

3. Cashflow Statement

4. Statement of Changes in Equity

5. Notes to Financial Statements

present economic resource controlled by the entity as a result of past events. an economic resource is a right that has potential to produce economic benefit

present obligation of the entity to transfer an economic resource as a result of past events

a. probable future economic benefits flowing to or from the entity

b. its cost or value can be realibly measured

a. item that my be reclassified to P&L

• debt FVOCI (changes in fair value in OCI, when sold in P&L)

• Cashflow Hedges (changes in OCI, if hedged transaction appears in P&L -> Recycling in P&L)

• Net Investment Hedges (same as cashflow hedge)

b. item that will not be reclassified to P&L (no Recycling)

• equity FVOCI -> irrevocable choice (dividends still in P&L)

• revaluation (IAS16/38)

• acturial gains and losses from defined benefit plans

1. evaluate the past performance of the company

2. provide a basis for predicting the future

3. help assess the risk and uncertainty of achieving future cashflows

equity (t+1) = equity (t) + transactions with shareholders + gains & losses

net income + non cash changes (depreciation, amortization, deffered taxes) - changes in NWC (inventories, operating receivables)

• Assumptions

• Estimations

• Judgement