The importance of disclosure fixed principle in
the preparation of financial reports to being one of the main foundations of
generally accepted accounting principles (GAAP). These principles and calls for
the full disclosure of all accounting and financial information and other
relevant actively involved and the financial statements contained in the
important information for the benefit of the last two recipients of this
information.
Disclosure also derives its importance from the
diversity and multiplicity of the beneficiaries of this information, which
includes bankers, investors, lenders, and observers, accountants, government
agencies and others. This is in addition to the implications of the decisions
taken by these parties based on this information. Therefore, disclosure of
incomplete or inaccurate may lead to a distortion of the decisions taken by
these entities that which would have negative effects.
The disclosure has gained increasing importance
at the present time especially with regard to the banking Ocean given the
complexity of the used financial instruments such as derivatives and
securitized assets and the size of the large circulation and the risks related
thereto. With the removal of restrictions on the deal, and competition is
increasing, and the evolution of the technique used in the deal, it is expected
that all of this leads to more complexity in the tools, which requires the need
for comprehensive disclosure. In this regard, it is required that banks
departments are working on the analysis of all types of risks involved in
dealing in these instruments, including credit risk, liquidity and markets,
exchange rate risks. Therefore, the unauthorized disclosure of information
relating to these risks is vital.
As a result, it has become the equipment more
complex task, like that of the rest of the traders in the financial markets.
They are therefore in need of a more comprehensive disclosure of financial
information in the context of their activity the supervisory office and the
field.
In this context, and given the importance of
accounting disclosure in the financial statements of banks, the International
Accounting Standards Committee issued International Accounting Standard (IAS
30) on the disclosure of financial statements of banks and similar financial
institutions have. The Commission is due to the issuance of this standard as it
represents the banks of the important and influential sector in the business
world, and the need for users of financial statements to banks to reliable and
comparable help them assess their financial positions and performance are
useful to them in making economic decisions and investment information.
For the effective application of the principle
of disclosure in the financial statements must observe and abide by the
application of accounting standards related to disclosure in banks, and these
criteria:
1. Standard investment and trading in the
securities portfolio and sets the standard accounting methods related to the
measurement developments on holding banks, securities and financial conditions,
as well as to determine the disclosure of my wallet trading and investment in
securities to banks for the purposes of publication requirements.
2. Standard deposit and it sets the standard
methods of measuring processes and developments and conditions associated with
customer deposits in banks, as well as the presentation and disclosure
requirements for data deposit.
3. Standard accounting changes and modification
of this standard errors and determines the processing method of accounting
changes and modify errors, as well as the presentation and disclosure
requirements of public accounting changes and modification errors.
4. Standard foreign currency This includes
standard accounting treatment of operations earmarked foreign currency
accounting treatment futures to buy and sell foreign currency, as well as the
accounting method for the preparation of computational data overseas branches
or subsidiaries of the Bank foreign companies, which are financial statements
in foreign currencies, also sets the standard presentation and disclosure requirements
associated with these things .
5. Standard fixed assets and assets acquired by
the Bank meet the debt due and sets the standard accounting methods for
measuring processes and developments and conditions resulting from the purchase
of fixed assets in the bank and the acquisition of real estate and other
assets, as well as identifies the requirements of presentation and disclosure
of these assets.
6. Standard consolidated financial statements,
investment in subsidiaries and sets the standard conditions that must be met to
unify the financial statements of the Bank and its subsidiaries, also
determines the way of consolidation, as well as the disclosure of the
subsidiaries that are consolidated in the consolidated data calculations.
7. Standard Presentation and Disclosure, this
standard defines the requirements of the public presentation and disclosure of
data in the calculation of banks prepared for publication purposes. This
criterion includes considerations determine whether to display items or parts
or groups in a separate form in computational data, including explanations or
merged with items or parts or other groups, as this standard refers to the need
to take into account other criteria with respect to the offer and disclosure in
the financial statements.
Select this standard financial statements to be
published and are:
1. The balance sheet.
2. Profit and loss statement and the allocation
of profits.
3. Statement of Cash Flows.
First, the balance sheet
The budget arrangement in the form of a list
showing the assets and liabilities and then followed by shareholders' equity.
And include the main items of both assets and liabilities are to be descending
according to the degree of liquidity, the list includes in addition to the
current fiscal year figures the previous year's figures for comparison
purposes.
Information that must be disclosed in the
balance sheet:
1. balances with the Central Bank.
2. Cash and balances with banks and financial institutions
and other banking institutions and include them in the notes separate item
shows the breakdown of this item in terms of cash on hand and balances local
and foreign balances.
3. government securities and government bail
and is included in the separate line item disclosures requires the details of
the main types of portfolio of government securities and government bail.
4. securities for trading and is included in
the notes separately disclose the stock distribution is in it for trading
between domestic and foreign, as well as require the disclosure of the market
value of the portfolio.
5. net of allowance for credit facilities, and
to include this item and should be disclosed to clarify which of the following
things:
- Items that make up the credit facilities and
amounts as well as the value of each of the outstanding benefits of a dedicated
credit facilities at hand and the value of the facilities.
- Another item the statement of the total
amounts and movements that have affected the doubtful debt provisions debts
payable movements and the movements of the city.
- An item on the statement in the aggregate
movements that have affected the outstanding benefits payable movements and the
movements of the city.
- An item on the distribution of credit facilities
by economic sector and defines credit facilities granted within and outside the
country.
- Item determines the credit facilities granted
to the government and to ensure them.
- Item determines the value of the credit
facility is operating in accordance with the instructions of the Central Bank
and its benefits to the revenue taken.
6. investment securities net of investment
allocations and inserts for this item should be clarified and disclosure for
the following:
- The distribution of the portfolio between
local securities of foreign securities, as well as what has been downloaded
from the value of the allocations falling stock prices.
- Determine the value of the investment in
subsidiaries and associated companies.
- Investments not included in the financial
markets and the value of available market price.
7. Fixed assets net of depreciation, and is
included for this item to clarify it shows the value of the fixed assets and
components, and distributed among property and equipment, furniture and cars,
and assets acquired through lease agreements, as well as allocations prepared
for every item of these assets.
8. Other assets is included to clarify this
item is disclosed in which all the components of other assets, so that shows
the value of the assets reverted to the bank to meet the debt owed, as well as
the expenses of incorporation and other details of the remaining assets.
What in the liability side are classified in
seven major items are as follows:
1. Customer deposits: is included to clarify
this item which is disclosed as follows:
- Distribution of customer deposits by
components under current accounts and demand, savings and time deposits, time
deposits, certificates of deposit).
- The value of government deposits.
- The value of deposits that do not bear
interest.
- The value of deposits is animated.
2. bank deposits and other banking
institutions: lists for this item is to clarify the disclosure about the
composition of these deposits. Current accounts and demand deposits maturing
within a year, and deposits maturing after a year.
3. amounts borrowed: lists for this item are
disclosed to clarify the lenders for a central bank, a local destinations,
third parties, as well as the disclosure of the amounts of these benefits and
guarantees provided for them.
4. Insurance cash: lists for this item and
clarify the disclosure of which is for distribution (direct insurance on
facilities and insurance to indirect facilities).
5. different allocations: lists for this item
is to clarify the disclosure of the components of the income tax allowance
allocations, end of service benefits and other allowances and allocations
remember the details.
6. Dividends proposed: is included to clarify
this item is disclosed for the per share dividend compares with the previous
year.
7. Other liabilities: lists for this item are
disclosed to clarify the details of other liabilities.
The shareholders' equity are classified in
eight items, namely:
- Paid-up capital.
- Legal reserve.
- Share premium reserve.
- Voluntary reserve.
- Foreign reserves branches.
- Other reserves.
- Foreign currency translation.
- Retained earnings losses.
And inserts for these items is to clarify the
disclosure for the following:
- Capital and number of ordinary shares and the
value of the stock details.
- Detect changes that have occurred in the
components of shareholders' equity during the year.
Second: The profit and loss statement and the
allocation of profits
Is in the form of the list and at the same
time, the list of data compared to the previous fiscal year, to be prepared to
indicate to the reader operating profit achieved by the Bank and non-operating
income and non-operating expenses incurred by the Bank to reach a net profit
and then distributed to the various items.
The list includes the following items:
1. Interest payable: lists for this item to
clarify which are disclosed interest income components on the terms of the
facilities and direct accounts of banks.
2. Add the commissions payable: lists for this
item is to clarify the disclosure of commissions payable directly distributed
between facilities and facilities indirect components.
3. descend benefits City: lists for this item
are disclosed to clarify the benefits of the components of the city during the
distribution to the various deposits and bank accounts items.
4. descend the city commission.
5. The result net interest and commission
income.
6. Add the profits of the securities portfolio
is included to clarify this item is disclosed in which the distribution of
these benefits and profits of government securities, and to ensure the
government, and on trading securities, and securities investment. And this is
also the distribution of profits and returns between stock returns and profits
equity deal.
7. Add the foreign exchange differences is
included to clarify this item which shows the profits or the sale and purchase
of foreign currencies and differences evaluation of foreign currency losses.
8. Add the other income and is included for
this item to clarify which are disclosed in other income components.
9. descend allocations credit facilities.
10.tensl allocations falling stock prices.
11.tensl general and administrative expenses
and included this item to clarify the disclosure of which is for general and
administrative expenses components.
12.alentijh net profit before tax.
13.tensl income tax provisions and included
this item to clarify which provisions are disclosed for the current fiscal year
and tax adjustments for prior years and recall where any timing differences
resulting from deferred taxes.
14.alentijh net profit for the year after
taxes.
15.tdhav to Retained earnings the first year.
16.alentijh customizable net profits.
17.eetm allocation of these profits on the
following items:
- Legal reserve.
- Voluntary reserve.
- Other reserves (remember the details).
- Provision for Directors' remuneration.
- Proposed dividend distributed to
shareholders.
- Retained earnings at the end of the year.
Third: Statement of Cash Flows
And it is in the form of a list, compared with
the previous financial year and include the following major items:
- Net cash from operating activities.
- Net cash from investment operations.
- Net cash from financing operations.
- Total represents the increase or decrease in
cash and cash is added at the beginning of his term to gain access to cash at
the end of term.
There are other major items must be disclosed
in the data prepared for publication and the minimum of information to be
disclosed, namely:
1. provide information on the bank of the
country where the founding date of incorporation and legal form and a summary
of the nature of his work and its objectives.
2. important and used in the calculation of
data preparation accounting policies.
3. Disclosure of assets and liabilities
maturity according to the schedule.
4. Disclosure of geographical concentration of
assets and liabilities and off-balance items.
5. Disclosure of related parties in terms of
facilities and outstanding allowances and benefits, deposits and off-budget
items, as well as the disclosure of benefits received and paid and bad debt.
6. Disclosure of whether there were
restrictions or mortgages on assets as collateral.
7. disclosure of the net position in foreign
currencies.
8. disclosed built on the Bank and other
contingent liabilities issues and remember any significant issues or claims or
other potential or contingent liabilities falling and show her potential
financial result.
9. Disclosure of the various statutory accounts
items Off balance sheet items with the need for disclosure of financial
derivatives.
This is in addition to the minimum of the
above-mentioned requirements include reports prepared for publication in
addition to the auditor's report for other things, according to the reader of
financial statements such as:
- Board of Directors report on the financial
accounts of the Bank and its activities and future plans.
- List of members of the Board of Directors.
- List of internal and external institutions of
subsidiaries and associate branches.