Financial Statements Demystified

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Allen & Unwin, Jan 1, 2002 - Financial statements - 353 pages
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This work takes the reader simply and lucidly through the elements of financial statements and ratio analysis and the theories and assumptions upon which accountancy is based. It offers readers the skills they need to understand and to assess financial statements. The keys are its transparent explanation of accounting information and its illuminating use of critical financial ratios. This revised edition has been updated and expanded using the International Accounting Standards. This recognizes the world-wide trend toward common accounting standards.

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If you know nothing about accounting and want to learn the basics this book will not help you.
I was so frustrated with this book I took a knife to it and removed the de from mystified.
I have
continued my accounting studies from other sources.
And I review this book from time to time.
And I don't doubt it has good intentions and technical correctness.
But it still sucks.


The basics of financial statements
The rules
Alba Manufacturing Limited
Points to remember
Income tax liabilities
What cash flow does not show
Analysing micro businesses
Groups of companies
Warning signals
Themes explored
Notes on selected countries

The bottom line
Foreign currency gains and losses

Common terms and phrases

Popular passages

Page 54 - Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement. An audit includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements. An audit also includes assessing the accounting principles used and significant estimates made by management, as well as evaluating the overall financial statement presentation.
Page 33 - IASB"), whose structure and functions are laid out in Sections 1933, shall be the standard-setting body of the IASC Foundation. The objectives of the IASC Foundation are: (a) to develop, in the public interest, a single set of high quality, understandable and enforceable global accounting standards that require high quality, transparent and comparable information in financial statements and other financial reporting to help participants in the world's capital markets and other users make economic...
Page 18 - The objective of financial statements is to provide information about the financial position, performance and changes in financial position of an enterprise that is useful to a wide range of users in making economic decisions.
Page 36 - Information is material if its omission or misstatement could influence the economic decisions of users taken on the basis of the financial statements.
Page 137 - It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or (ii) The amount of the obligation cannot be measured with sufficient reliability.
Page 127 - ... a present obligation of the enterprise arising from past events, the settlement of which is expected to result in an outflow from the enterprise of resources embodying economic benefits...
Page 88 - Fair value is the amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's length transaction.
Page 82 - An item that meets the definition of an element should be recognised if: (a) it is probable that any future economic benefit associated with the item will flow to or from the enterprise; and (b) the item has a cost or value that can be measured with reliability.
Page 147 - IAS 37 as (a) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity...

About the author (2002)

Working throughout Australia and Asia, David Hey-Cunningham teaches the reading and interpretation of financial statements to people from all walks of business, including small business owners, financial analysts, government and not-for-profit organisations.

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