Hailey College of CommerceUniversity Of The Punjab

Project ofApplication of IAS 1 & IAS 2

IBNE SHABEER FOOD (PVT) LTD.

Submitted Tto

Professor. Waqar Hassan Randhawa Sahib

Submitted By:

Mansoor Nisar (MC14-283)

Muhammad Usman (MC14-263

Introduction:

Our company makes the food items like milk, biscuits, yogurt etc. The food industry is a complex, global collective of diverse businesses that supply much of the food and food energy consumed by the world population. Only subsistence farmers, those who survive on what they grow, can be considered outside of the scope of the modern food industry.

It has the five branches in the big cities of Pakistan and 3000 active employees in all five heads and the company is pubic limited and apply all the rules under the SECP and also registered under this regulatory

authority. And follows the IFRS and IAS (Accounting standards).

VisionTo be a leader in the market we serve by providing

quality products to our consumers while learning from their feedback to set even higher standards.

To be a company that continuously enhances its superior technological skills to remain locally competitive in this day and age of increasing challenges.

To be a company that attracts and retains competent people by creating a culture that fosters innovation, promotes individual growth and rewards initiative and performance.

To be a company that fulfills its social responsibility.

MISSION To sell delicious and remarkable food items. That the food and drink we sell meets the

highest standards of quality.

To consistently provide our customers with impeccable service by demonstrating warmth, graciousness, efficiency professionalism and integrity in our work.

Application of International Financial Reporting Standards conceptual Frame work, IAS 1( Presentation of financial statements ) and IAS 2(Inventory):

Assumptions:

The accounts have been prepared on these assumptions that company records all transactions on the accrual basis:

Accrual basis:

As we recognize the transactions as they occur irrespective of the whether the cash or cash equivalent is received or not.

Going Concern:

As the accounts have been prepared on the going concern basis not on liquidation basis as not the company is curtailing its major part of its business not and continuing its operation foreseeable future. As the profit of the company has been increase from the previous year as mentioned in the statement of financial performance of the company.

IBNE SHABEER FOOD (PVT) LTD.

BALANCE SHEET FOR THE YEAR ENDED DECEMBER 31 ST , 2015

IBNE SHABEER FOOD (PVT) LTD.

INCOME STATEMENT FOR YEAR ENDED DECEMBER 31 ST , 2015

IBNE SHABEER FOOD (PVT) LTD.

CASH FLOW STATEMENT

Materiality:

While continuing with our efforts towards promotion of high quality education for training of employees we contributed Rs. 1 Million to training and development program. And this information is relevant so we disclose it.

Financial statements:/faithful representation:

The financial statements are complete, no doubt of error and without biasness. International accounting standards have been followed.

Going Concern Test: There is no significance doubt about the company’s ability to continue as going concern. As the profit is more in 2015 and also earning per share is more.

Departure:The company has not taken the departure as it is working under the IAS standards.

Comparability And verifiability:

The profit of the company in previous year(2014) is Rs. 15,000and now is Rs. 18,000 it is comparable and verifiable. If there will be more difference then it would not be comparable and verifiable.

*All the information has been mentioned in the financial statements accounting records within the specified time period as and relevant to that period which shows the Timeliness.

And information are easy to understand . For those who are the users of this information.

Elements of financi a l statements

Assets:These are the resources controlled by the entity and future economic benefits are expected.

Current Assets:

Stores, spares and loose tools:Usable stores, spares and loose tools are valued principally at moving average cost, while items consideredobsolete are carried at nil value. Items in transit are valued at cost comprising invoice value plus othercharges paid thereon. Stock-in-trade:Stock of raw materials, except for those in transit and finished goods are valued principally at the lower of moving average cost and net realizable value. Cost of raw material signifies average direct material cost.Finished goods comprise cost of direct materials, labour and appropriate manufacturing overheads. Materials in transit are stated at cost comprising invoice value plus other charges paid thereon.

Net realizable value signifies the estimated selling price in the ordinary course of business less costsNecessarily to be incurred in order to make a sale.

Property plant and equipment is the fixed asset of the company and in the control of the entity which will provide the future economic benefits to the entity. And has been written in the balance sheet cost less accumulated depreciation.

Subsequent cost is included in the asset carrying amount recognized as a separate asset.

Intangible asset

Is the cost of computer software acquired and stated at cost less accumulated amortization.

Biological Assets:

These comprises of live stock and trees. And has been stated in the balance sheet at fair value less estimated point of sale cost.

Liabilities:

These are the present obligation of the entity from which outflow from the entity is expected.

Borrowing are classified as the current liability unless the company unconditional rights to deferred settlement of liability. And other liabilities also has been mentioned fairly.

Owner Equity:

It is the residual interest of in the asset of the company after deducting all its liability.

Ordinary shares are classified as equity and recognized at their face value.

Dividend distributed to the members are recognized as the liability of the company in the period at which these are distributed.

And the complete financial statement show the true and fair view as per standards and shows faithful representation.

Profit & loss A/c

Income:

Increases in economic benefits during the accounting period in the form of inflows or enhancements of assets or decreases of liabilities that result in increases in equity, other than those relating to contributions from equity participants.

Expenses”

Decreases in economic benefits during the accounting period in the form of outflows or depletions of assets or incurrence’s of liabilities that result in decreases in equity, other than those relating to distributions to equity participants.

And all these are stated according to the accounting standards in the profit and loss account.

Recognition criteria:

All the items of the financial statement have been recognized on the basis of that these can be measured in monetary terms and reliably. And future economic benefit will inflow or outflow from the entity.

Presentation of financial statementsComparative Information:

Information in the profit and loss account and in balance sheet has been described in comparative form as 2015 and 2014 to show the reliability and verification of the previous year profit and balance of the balance sheet of the last year.

Materiality and Aggregation: A transaction that is first documented (onto a source document). The document is then journalized (in subsidiary journals). The journal is then posted (into the subsidiary and general ledger). The ledger is summarized into the trial balance. The trial balance is summarized into the detailed set of financial statements – a

summary used by internal users (e.g. management).

Segregation:Any item which is material has been disclosed separately which is material. As contribution made by the company for training of employees.

Offsetting of financial assets and financial liabilities:Financial assets and financial liabilities are offset and the net amount is reported in the financialStatements only when there is a legally enforceable right to set off the recognized amount and the company intends either to settle on a net basis or to realize the assets and to settle the liabilities simultaneously.

Reclassification of assets:IAS 1 (amendment), ‘Financial statement presentation’ regarding other comprehensive income is effective for periods. It requires entities to group items presented in ‘other comprehensive income’ (OCI) on the basis of whether they are potentially reclassifiable to profit or loss subsequently (reclassification adjustments). The amendments do not address which items arePresented in OCI. This does not have a material impact on company’s financial statements.

Consistency of presentationThere is consistency in the principal of the accountings as depreciation has been charged on straight line method and no changes has been made in the method of depreciation and this method we are using from three or four years previousely.

Frequency of reporting:

As per standard we disclose our accounts in the financial statement for the period of (52) fifty two weeks and our year starts from 1st

January and ends on 31st December.

And no change the accounting period during the life of the business.