Transformation of financial statements
One of the main methods for preparing financial statements in accordance with IFRS is transformation, which is regrouping accounting information prepared under the national accounting standards (NAS) into the accounting that meets IFRS requirements. All accounting information prepared under NAS is analyzed and necessary adjustments are made in accordance with IFRS.
Main stages of transformation:
- Developing accounting policies;
- Selecting functional and presentation currency;
- Calculating opening balances;
- Developing transformation model;
- Estimating corporate structure of the company in order to determine subsidiaries, associated, affiliated and joint venture companies which are to be included into the accounting;
- Determining special features of the company’s business and gathering information necessary to calculate transformation adjustments;
- Regrouping and reclassification of financial statements items from NAS into IFRS.
Results of transformation of financial statements to IFRS:
- financial statements, including:
- statement of financial position;
- statement of comprehensive income;
- statement of changes in equity;
- statement of cash flows.
- notes, with summary of significant accounting policies and other explanatory information required under IFRS; notes include essential information about the company, its financial position, comparability of data for the financial and preceding years, valuation methods and essential financial statements items.