03-07-2007, 06:05 PM
Dear,
The clarification provided by Abdur.Rehman is of importance to you.
The financial statements as per IAS 1 include following components
Balance sheet
Profit and loss account
Cash flow statement
Statement of changes in equity
The last two are needed for listed companies or for subsidiaries of listed companies.
Whenever financial statments are prepared, profit and loss account shows the financial results and is based upon a specified period i.e. for a month, quarter, half year or year.
Balance sheet does not show the financial results, it infact shows the financial position and is focussed to a speceific date. The financial position on any specific date.
So, even if you have not performed your business for a single day, you can prepare Balance Sheet (but you cannot prepare profit and loss account as no business is conducted).
In case u have not performed the business transaction and there is no profit and loss account, you can even then prepare the balance sheet by showing the assets and liabilities/capital injected by you on any specific date.
Such balance sheet will show, on asset side any Cash in hand, cash at bank, any fixed asset acquired by you or injected by you as part of capital, any other asset as inventories, unconsumed stationary and refundable paymanets to goverment. Partnerships can even show deferred cost as an asset that is not allowed to companies after change in Companies ordinance.
On liabilities side, such balance sheet will show first of all your capital that is a notional figure. Capital might have been injected on asset side as cash or any other asset. Apart from capital, there could be some liability against any asset purchased or invetories acquired/purchased etc. Any liability towards govermental agencies can also appear on balance sheet if it exists.
These all assets and liabilities have nothing to do with the preparation of profit and loss account.
However, such balance sheet will not show any amount of accumulated surplus/deficit as no business has been yet conducted.
You can get such balance sheet prepared and audited by CAs based upon your record and actual balances appearing in your cash book and general ledger and can submit to the relevant authorities.
Hope the matter is clarified.
Best regards.
Kamran.
The clarification provided by Abdur.Rehman is of importance to you.
The financial statements as per IAS 1 include following components
Balance sheet
Profit and loss account
Cash flow statement
Statement of changes in equity
The last two are needed for listed companies or for subsidiaries of listed companies.
Whenever financial statments are prepared, profit and loss account shows the financial results and is based upon a specified period i.e. for a month, quarter, half year or year.
Balance sheet does not show the financial results, it infact shows the financial position and is focussed to a speceific date. The financial position on any specific date.
So, even if you have not performed your business for a single day, you can prepare Balance Sheet (but you cannot prepare profit and loss account as no business is conducted).
In case u have not performed the business transaction and there is no profit and loss account, you can even then prepare the balance sheet by showing the assets and liabilities/capital injected by you on any specific date.
Such balance sheet will show, on asset side any Cash in hand, cash at bank, any fixed asset acquired by you or injected by you as part of capital, any other asset as inventories, unconsumed stationary and refundable paymanets to goverment. Partnerships can even show deferred cost as an asset that is not allowed to companies after change in Companies ordinance.
On liabilities side, such balance sheet will show first of all your capital that is a notional figure. Capital might have been injected on asset side as cash or any other asset. Apart from capital, there could be some liability against any asset purchased or invetories acquired/purchased etc. Any liability towards govermental agencies can also appear on balance sheet if it exists.
These all assets and liabilities have nothing to do with the preparation of profit and loss account.
However, such balance sheet will not show any amount of accumulated surplus/deficit as no business has been yet conducted.
You can get such balance sheet prepared and audited by CAs based upon your record and actual balances appearing in your cash book and general ledger and can submit to the relevant authorities.
Hope the matter is clarified.
Best regards.
Kamran.
