Welcome to your next module, FNSACC414 - Prepare financial statements for non reporting entities.
Accounting and the process of preparing financial statements enable business owners, managers, and key stakeholders to make informed operational, financial, and strategic decisions. This process involves collecting and recording financial data and presenting it in an easily understandable and usable format for decision-making purposes. The most common financial statements are:
- Profit & Loss Statement: This statement summarises the revenues, expenses, and resulting net income or loss of a business over a specific period, typically monthly, quarterly or yearly.
- Balance Sheet: The balance sheet provides a snapshot of a business’s financial position at a particular point in time, detailing its assets, liabilities, and equity.
- Cash Flow Statement: This statement tracks the inflows and outflows of cash and cash equivalents within a business, grouping them into operating, investing, and financing activities.
Reporting entities are required to produce General Purpose Financial Reports, which are prepared following accounting standards. These reports are designed to provide a comprehensive view of the financial performance and position of the entity to external users, such as investors, creditors, and regulators. On the other hand, non-reporting entities are not obligated to prepare General Purpose Financial Reports but must still adhere to legislative requirements to maintain adequate records, meet taxation obligations and fulfil any other specific requirements as directed by their organisational structure or activities.
In this module, you will be presented with the skills and knowledge required to prepare financial statements for entities that do not have a statutory duty to file financial reports with government agencies and regulators.
It applies to individuals who use specialised knowledge and systematic approaches to collate and prepare financial information in line with accounting standards.
The knowledge covered in this module is included but not limited to:
- Compiling data required for preparing financial statements for non-reporting entities
- Preparing financial statements for non-reporting entities
After each topic, you will have the opportunity to engage in learning activities. These learning activities will allow you to test your understanding of the topic before undertaking the assessment. Solutions to the learning activities are provided; however, we encourage you to attempt the activity before viewing the answer. If you have questions regarding your answers and/or the solutions provided, contact your trainer.
At the end of this module, you will be required to undertake two case study assessments.
These assessments use a simulated business called Bounce Fitness and Xero accounting software. Xero Free Trial | Xero You must access the free trial version of Xero and complete the assessments within 30 days of creating the simulated company file.
Please be aware that the Xero license provided to you is a trial version only. It is crucial to complete these assessments within this 30-day timeframe. We encourage you to manage your time effectively and plan your coursework accordingly. Failure to complete the assessments before your trial expires will result in losing access to your Xero file, and any work you have completed to date will be irretrievably lost.
Before you begin the assessments, we recommend downloading and reading 'Prepare to Use Xero'. This document gives clear, step-by-step instructions on how to use Xero for the case studies. It also includes links to Xero Central for more help if needed.
