Both types of financial statements

For, the liabilities in both types of financial statements can be subdivided into the current liabilities as well as the non –current liabilities. Current liabilities in both types of financial reports arose out of the company’s normal everyday operations. The normal operation of a grocery is selling food items. The normal operation of an appliance store is selling appliances. Current liabilities in both types of financial statements are expected to be paid or settled within one year after the financial statement dates.

Long term liabilities in both types of financial statements are described as items that are not expected to be paid within twelve months from the financial statement dates. Another description of non-current liabilities of both types of financial statements is the liabilities are expected to be refinance and converted to long term basis. Obviously, both the financial statements prepared using the International Financial Reporting Standards as well as the non IFRS based reports contain a liabilities portion(Duchac 1998).

Also, both the financial statements prepared using the International Financial Reporting Standards as well as the non IFRS based reports contain a shareholders’ equity portion. The stockholders’ equity portion of the financial statements of both types of financial statements can be arrived at by getting the difference between the total assets and the total liabilities mentioned in the balance sheet portion of the financial statements. This formula describes the shareholders’ equity as net assets.

The shareholders’ equity is increased by the increases in the total assets portion of the balance sheet. It is also decreased by the increase in the total liabilities section of the balance sheet. Also, this part of the balance sheet is increased by profits and additional investments by the new as well as current shareholders and decreased by losses and withdrawals. Surely, both the financial statements prepared using the International Financial Reporting Standards as well as the non IFRS based reports contain a shareholders’ equity portion(Kirkegaard 1997, 27).

And, both financial statements prepared using the International Financial Reporting Standards as well as the non IFRS based reports show the revenues of the company. The revenues stated in the financial statements of both types of financial reports are described as the increase in economic benefits that have been generated within one accounting cycle that usually ends in one year. Generally, one year ends on December 31.

The revenues could be in the form of increases in total assets or decreases in total liabilities. Revenues could be generated from sale of inventories in a merchandising company(Kirkegaard 1997, 29). Many companies using both types of financial statement types record this type of revenue as SALES. Another type of revenue that professionals using both types of financial reports like lawyers, engineers, doctors and accountants use for rendering their personal expertise to help other people is called PROFESSIONAL FEES.

In addition, revenues of companies using both types of financials statements under our study is generated by letting other people use on a temporary basis an office or  business space is called RENT INCOME. Revenues in both types of arise from the normal business operations of an organization. Other titles used for revenues in both types of financial statements are interest income, dividend income and royalty income. Evidently, both financial statements prepared using the International Financial Reporting Standards as well as the non IFRS based reports show the revenues of the company(Leuz, Pfaff, and Hopwood 2004, 3).