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Financial Statements (Companies) Flashcards

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  1. Under FRS 102, which of the following is included in the primary financial statements of a limited company?

    Answer: A statement of cash flows, statement of financial position, income statement, and statement of changes in equity

    A complete set of financial statements under FRS 102 comprises a statement of financial position, statement of comprehensive income (or income statement + OCI), statement of changes in equity, statement of cash flows, and notes.

  2. Under Companies Act 2006, the filing deadline for private company accounts at Companies House is:

    Answer: 9 months after the accounting reference date

    Private limited companies must file accounts at Companies House within 9 months of their accounting reference date. Public companies have 6 months.

  3. Goodwill arising on the acquisition of a subsidiary must be:

    Answer: Capitalised and amortised over its useful economic life under FRS 102

    Under FRS 102, goodwill on consolidation is capitalised as an intangible asset and amortised over its useful economic life. If useful life cannot be estimated reliably, it is amortised over a maximum of 10 years.

  4. The statement of changes in equity reconciles:

    Answer: Opening and closing equity balances by showing all movements including profit, dividends, and share issues

    The statement of changes in equity shows how shareholders' equity changed during the period: opening balance + profit for the year + other comprehensive income − dividends + share issues ± other movements = closing balance.

  5. Under FRS 102, internally generated goodwill:

    Answer: Cannot be recognised as an intangible asset

    FRS 102 (consistent with IFRS) prohibits recognition of internally generated goodwill — only goodwill arising on business combinations can be recognised.

  6. In a set of consolidated accounts, intragroup dividends paid by a subsidiary to the parent are:

    Answer: Eliminated on consolidation — they do not appear in the consolidated income statement

    Intragroup dividends are eliminated on consolidation; they represent a transfer within the group, not income from outside, and would otherwise double-count within the consolidated statements.