What a complete set of financial statements contains
The statements and notes that make up a complete set under IAS 1, and what is missing when a client hands over only an income statement and balance sheet.
By Achekam · · 5 min read · For Accountants & audit firms in South Africa, Nigeria, Kenya
"The accounts are done," says the client, and sends a two-page PDF: an income statement and a balance sheet, printed from their bookkeeping package. For running the business, that may be all they look at. For a bank's credit committee, a tender evaluation or a shareholder's annual meeting, it is not financial statements at all.
The gap between what clients think of as "the accounts" and what a complete set contains is one of the most common conversations in practice. It helps to know exactly what the standard lists, why the missing pieces cannot simply be printed from the books, and how the firm turns the client's figures into a full set.
The components IAS 1 lists
Under IAS 1, a complete set of financial statements comprises:
- a statement of financial position;
- a statement of profit or loss and other comprehensive income;
- a statement of changes in equity;
- a statement of cash flows; and
- notes.
IAS 1 allows the profit or loss and other comprehensive income to be presented as one combined statement or as two separate statements. It describes other comprehensive income as items of income and expense that are not recognised in profit or loss under IFRS.
IAS 1 also requires a complete set at least annually, with comparative amounts for the preceding year, including comparatives in the notes. A set with only the current year is incomplete even if every statement is there.
The IFRS Foundation's IAS 1 summary page lists these components. It also records that a February 2021 amendment replaced the requirement to disclose significant accounting policies with one to disclose material accounting policy information. Looking ahead, IFRS 18 replaces IAS 1 for annual reporting periods beginning on or after 1 January 2027; the IFRS Foundation notes that the IASB focused on the statement of profit or loss rather than reconsidering every part of IAS 1, and that IFRS 18 keeps the annual and comparative requirement.
What management accounts usually leave out
Management accounts are built for managers. Measured against the list above, the typical client pack is missing:
- The statement of changes in equity. Owners' movements, dividends and reserves are buried in the balance sheet, if they appear at all.
- The statement of cash flows. Most packages produce a bank report, not a classified cash flow statement.
- Notes. Accounting policies, judgements, the breakdowns behind each line, related parties, commitments and events after the reporting date.
- Comparatives presented properly. Many packs compare with last month or budget, not with the prior year's audited or reviewed figures.
- Year-end adjustments. Depreciation, accruals, prepayments, provisions and tax are often estimates or missing entirely.
There is also the question of period. A pack run for "year to date" in a package may not match the client's financial year at all.
Why two statements need more than the books provide
The statement of changes in equity and the cash flow statement are not just different layouts of ledger balances. They need information about how balances moved.
For changes in equity, the firm needs to separate profit for the year from dividends, capital introduced, share issues and any other movements recorded directly in equity. A single retained earnings balance does not say which is which.
For the cash flow statement, the firm needs to classify cash into operating, investing and financing activities and work out figures, such as asset purchases, tax paid and dividends paid, that no ledger account records directly. That takes the opening and closing balance sheets, the year's non-cash movements and judgement about classification.
Where the client's own Achekam books fit
When a client keeps its books on Achekam, its management accounts show an income statement for a chosen period beside the period before, and a balance sheet at period end, both added up from the business's own journals and exportable as PDF or CSV. One detail to watch: the year-to-date preset starts on 1 January, not on the business's own financial year start, so a client with a February or June year end needs to pick its own dates.
The client's books on Achekam do not produce a cash flow statement. That is a current limit, and it is one reason the client's own reports are not the annual financial statements.
How the Studio builds the full set
On the firm's side, Achekam's Studio builds a draft set of annual financial statements from a mapped trial balance, with every figure calculated in code. The draft includes the directors' report, the four primary statements, accounting policies, notes and a detailed income statement. The practitioner's report follows the level the firm chooses: audit, independent review, compilation or none. A block that a person has edited is kept when the draft is rebuilt.
So the work moves from typing to reviewing: checking the mapping, the year-end adjustments, the policies and the judgements behind the notes. The figures in each statement come from the same trial balance, which keeps them consistent with each other.
Issuing the set as one locked document
Staff can download the statements as an A4 PDF made on Achekam's server. Issuing stores the final PDF with a fingerprint and locks that version, so the set the client signed is the set that stays on file.
The board and tax packs are the statutory set under another name, and their cards list what is not yet included. That list is a useful last check: if a component is missing, the card says so before the pack goes out.
Explaining the difference to the client
A short message usually resolves the confusion:
| The client's pack | The annual financial statements |
|---|---|
| Income statement and balance sheet | All four primary statements and notes |
| Compared with last month or budget | Compared with the prior financial year |
| Year-end adjustments estimated or missing | Adjustments posted and reviewed |
| For managing the business | For owners, lenders, regulators and tax authorities |
For how the draft is built, see a draft set from a mapped trial balance. Client management accounts covers getting more from the client's own reports during the year, and the statement of changes in equity walks through the statement clients most often forget. When the next "accounts are done" e-mail arrives, reply with the list of components and ask for the information the missing ones need.
General guidance only, not advice on your own circumstances. Tax and payroll rules change: check the current position with the authority or your adviser.
