PRESENTATION OF FINANCIAL STATEMENT- IPSAS 1

Introduction
The aim of this standard is to prescribe the format in which general purpose financial
statements should be presented so that it can be compared with the entity’s financial
statements of previous periods and with the financial statements of other entities in the same
sector.

Components of Financial Statements

The standard list the following as a complete set of financial statements:
(a) A statement of financial position.
(b) A statement of financial performance
(c) A statement of changes in net assets/equity
(d) A cash flow statement
(e) Statement of Accounting Policies and notes to the Financial Statements and
(f) Statement of Comparison of Budget and Actual amount.

Information to be presented on the Face of the Statement of Financial Position

The standard provides the following information should be presented on the face of the
statement of financial position:
(a) Property, plants and equipment;
(b) Investment property;
(c) Intangible assets;
(d) Financial assets (excluding amount shown under (e), (g), (h), and (i);
(e) Investment accounted for using the equity methods;
(f) Inventories;
(g) Recoverable from non-exchange transactions (taxes and transfers);
(h) Receivables from exchange transactions;
(i) Cash and cash equivalents;
(j) Taxes and transfers payable;
(k) Payables under exchange transactions;
(l) Provisions;
(m) Financial liabilities (excluding amounts shown under (j), (k), (l);
(n) Non-controlling Interest, presented within net assets/equity; and
(o) Net assets/equity attributable to owners of the controlling entity.

Information to be presented on the Face of the Statement of Financial Performance

As a minimum, the statement shall include line items that present the following amounts for
the period:
(a) Revenue;
(b) Finance costs;
(c) Share of the surplus or deficit of associates and joint ventures accounted for using the equity
method;
(d) Pre-tax gain and loss recognised on the disposal of assets or settlement of liabilities
attributable to discontinuing operations; and

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(e) Surplus or deficit

(1) The following information have been extracted from the books of Bolus Electricity Board, for
the year ending 31 December, 2008:
N’000
Accumulated Depreciation, 01/01/2008 45,224
Sale of Electricity 114,392
Purchase of Electricity 95,784
Meter reading, billing and collection of electricity 1,624
Non-Current Assets Expenditure 84,102
Debtors for electricity consumption read in the year and other sales 12,006
Training and welfare 692
Stock and work in progress 1,234
Rents, Rates and Insurance 2,126
Electricity Estimated unread consumption 7,222
Administration and General Expenses 1,476
Electricity Council Grant 21,556
Preparation of Electricity Council’s Expenses 362
Bank Balance and Cash 1,284
Depreciation for the year 3,634
Hire purchase and deferred payment installations not yet due 2,672
Interest and Financing Expenses 2,434
Creditors and accrued liabilities 13,926
Profits on contracting and sale of appliance poles A/c 534
Reserves 23,116
Rental of Meters Application, etc. 556
Distribution cost 4,476
Customer Service 1,810
You are further informed that depreciation for year 2008 was N3,634,000.
Required:
Prepare in the vertical form the Statement of Financial Performance and
Statement of Financial Position of the Bolus Electricity Board, for the year ended
31 December, 2008.

((2) The following information relate to the accounts of OKOKOMAIKO State

University for the year ended 31st December 2008:
Dr. Cr.
N’000 N’000
Land and Buildings (cost) 55,000
Long-term investments 25,000
Accumulated Depreciation:
- Land and Building 6,000
- Motor vehicles 2,000
- Equipment and furniture 1,500
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Motor vehicles(cost) 28,000
Grants from Central Government 15,000
Grants from State Government 5,000
Grants from Local Governments 3,500
Endowment, donations and subventions 39,000
Computer Board grant 10,000
Residences and catering operations 5,000 7,500
Academic fees and support grant 9,000
Maintenance of premises 2,000
Academic services 3,000
Academic departments 10,000
General education expenditure 9,000
Equipment and furniture 17,000
Miscellaneous Expenditure/Income 5,000 4,500
Research grant and contracts 3,500 4,000
Long-term loans 50,000
Current Assets/Liabilities 15,500 4,500
Appeal funds 5,000
General fund 10,500
Reserves 1,000
178,000 178,000
The following additional information are also relevant, viz:
(i) Loan interest outstanding at the end of the year was N5 million.
(ii) Depreciation on fixed assets is charged at the following rates on cost:
- Building is 5% (cost of land is N25 million)
- Motor vehicles is 20%
- Equipment and furniture is 15%
(iii) A building costing N5 million with accumulated depreciation of N1 million was sold for N8
million. This transaction has not been adjusted in the accounts.
(iv) Interest receivable amounted to N6 million while N5 million should be transferred to
reserves.
Required:
Prepare the Statement of Financial Performance of the University for the year ended 31st
December 2008 and Statement of Financial Position as at that date

IPSAS 2: CASH FLOW STATEMENT

Introduction
This standard requires the presentation of information regarding the historical changes in cash
and cash equivalents of an entity by preparing a cash flow statement. The statement classifies
periodic cash flows into operating, investing and financing activities. The IFRS on which the
standard is based is IAS 7 on Cash Flow Statement

Key Terms in Cash Flow Statements

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Cash: This comprises cash on hand and demand deposits in the bank.
Cash Equivalents: Cash equivalents are short-term, highly liquid investments that are readily
convertible to cash and which are subject to insignificant risk of changes in value.
Cash Flows: These are inflows and outflows of cash and cash equivalents.

Classification Of Cash Flows By Activities

Operating Activities: These are the principal revenue producing activities of the enterprise. They
are not investing or financing activities.
Examples of Operating Activities
(a) Cash received from the sale of goods and rendering of services.
(b) Receipts from internally generated revenue of government.
(c) Cash payment
(c) Cash payments for overhead expenses.
(d) Payment of personal emoluments.
(e) Receipts from statutory allocations of Government.

Investing Activities
These are the acquisitions and disposals of long-term assets and other
investments not included in cash equivalents.
Examples of Investing Activities
(a) Cash payments to acquire property, plant and equipment, intangible and other long-term
assets.
(b) Cash received from the sale of property, plant and equipment, intangible and other long-
term assets.
(c) Cash payments to acquire equity or debt instruments of other enterprises and interest in
joint ventures.
(d) Cash received from the sale of equity and debt instruments of other enterprises and
interests in joint ventures.
(e) Cash advances and loans made to other parties, other than advances and loans made by the
financial institutions.
(f) Cash payments to suppliers for goods and services.
(g) Cash payments to and on behalf of the employees.
(h) Cash payments for the purchase of motor vehicles.

Financing Activities
These are activities which result in changes in the size and composition
of equity capital and borrowing of the enterprise. Examples are:
(a) Cash proceeds from issuing shares and other equity instruments.
(b) Cash payments to the owners to acquire or redeem the enterprise’s shares.
(c) Cash proceeds from issuing debentures, loans, bonds, mortgages and other short or long-
term borrowing.
(d) Cash repayments of amount borrowed.

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(e) Cash payments by a lessee for the reduction of the outstanding liability relating to a finance
lease.
(f) Cash dividends

(3) The following information has been extracted from the records of WELFARE State of Nigeria,
for the year ended 31 December 2008.
N’000
Personal Emolument 2,000,000
Consolidated Revenue Fund charges 1,000,000
Statutory Revenue allocation 20,000,000
Proceeds from the sale of fixed assets 100,000
Purchase of marketable securities 50,000
Purchase and construction of fixed assets 500,000
Share of value added tax 200,000
Share of excess crude oil 100,000
Internally generated revenue 10,000,000
Gratuities and pensions 15,000,000
Miscellaneous income 50,000
Overhead expenses 36,000
Recurrent grants made 20,000
Miscellaneous expenses 10,000
Servicing and repayment of public debts 100,000
Grants and subventions from Non-Governmental Organisations 200,000
Proceeds from loan and other borrowings 300,000
Dividends received 100,000
You are required to:
Prepare the State’s Cash Flow Statement for the year ended 31 December 2008, using the
direct method approach.

(4) Records from the Office of the Accountant General of the Federal Democratic Republic of Naija for
the year ended December 31, 2015 stated the following:
REVENUE/EXPENDITURE 2015 2014
(N Million) (N Million)
Value Added Tax receipts 1,721,250 1,647,000
Miscellaneous Revenue 281,250 318,750
Personal Income Tax – Direct Tax 7,875,000 5,400,000
Allocation of Collection Costs
(FIRS and Customs) 2,306,250 2,478,750
Personnel Costs 5,400,000 7,200,000
Share of Statutory Allocation 10,125,000 6,337,500
CRF Charges 1,687,500 2,812,500
Grants and Subvention from Foreign donors 56,250 65,250
Rent from Government Properties 213,750 221,250
Overhead charges 1,125,000 900,000
MDAs Subvention 1,350,000 1,425,000

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Sales of Government Properties 281,250 363,750
Loans Repayments 652,500 182,250
Purchases and reconstruction of Non-Current Assets 1,875,000 2,025,000
Proceeds from sales of Federal Government Properties 787,500 -
Purchase of Market securities 375,000 225,000
Cash and Cash equivalent (January 1, 2015 2,812,500 -
Proceeds from Loans and other borrowings 2,250,000 750,000
Cash and Cash equivalent (December 31, 2015) 16,245,000 2,812,500
Required:
Prepare a Cash Flow Statement for year ended December 31, 2015 using Direct Method (Show
Comparative Figures)

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