For-Profit Financial Statements and Core Presentation Rules

This chapter covers the core financial statements for standard for-profit entities. The key is to see how the balance sheet, income statement, cash flows, equity statement, and notes fit together so later account treatment makes sense in a full reporting context.

In This Chapter

• Balance Sheet Presentation covers the primary statement of financial position.
• Income Statement Formats explains income statement structure.
• Comprehensive Income and OCI adds broader performance reporting.
• Statement of Changes in Equity covers equity movement.
• Statement of Cash Flows explains cash classification and presentation.
• Notes and Related Party Disclosures covers supporting disclosures.
• For-Profit Reporting Cases integrates the pieces in application form.

How to Use This Chapter

• Read this chapter early because the rest of FAR assumes a working statement model.
• Focus on how items flow across statements and disclosures.
• Return here when a later account topic makes less sense because the overall statement framework is fuzzy.

In this section

• Balance Sheet Classification and Presentation Under U.S. GAAP
  FAR coverage for balance sheet structure, current and noncurrent classification, equity presentation, and related disclosures.
• Income Statement Formats and Performance Subtotals
  FAR coverage for single-step and multi-step income statements, operating versus nonoperating items, and key subtotals.
• Comprehensive Income, OCI, and Reclassification Effects
  FAR coverage for OCI components, presentation alternatives, reclassification adjustments, and AOCI flow.
• Statement of Changes in Equity and AOCI Activity
  FAR coverage for equity components, share issuances, dividends, treasury stock, retained earnings, and AOCI activity.
• Statement of Cash Flows Classification and Presentation
  FAR coverage for operating, investing, and financing cash flows, direct and indirect methods, and reconciliation issues.
• Footnote Disclosures, Accounting Policies, and Related Parties
  FAR coverage for summary policies, footnote structure, related party disclosures, and note-based reporting issues.
• Integrated Cases in For-Profit Financial Reporting
  FAR case coverage tying together core statements, disclosures, and presentation issues in for-profit reporting.