financial accounting

3 requirements of IFRS 8 on identification of reportable segments.

IFRS 8 reporting segments seeks to assist the user of financial statements gain a clearer understanding of the performance of the business by requiring disaggregation of the reported financial information into segments.

Definition of reportable segment.

IFRS 8 requires an entity to report financial and descriptive information about its reportable segments. Reportable segments are operating segments or aggregation of reporting … Read the rest

Five (5) components of set of financial statements.

Financial statement are report prepared by management of the entity to provide information to owners of the entity and other users about the financial position and financial performance of the entity.



The following are components of set of financial statements:

  • statement of financial position;
  • statement of comprehensive income;
  • statement of changes in equity;
  • statements
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6 Limitation of financial accounting.

Financial accounting is the process of recording, summarizing and reporting the myriad of transactions resulting from business operations over a period of time.

The following are limitation associated with financial accounting:



  • Financial accounting is historical in nature. Financial accounting present financial statement at the end of the period which normally covers the year in length
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What is meant by associate in consolidated financial statements?



An associate is an entity over which the investor has significant influence. Significant influence is the power to participate in the financial and operating policy decisions of the investee, without having control or joint control over these policies.



 Significant influence is normally assumed to exist if the investor own between … Read the rest