Financial Statements of Banks and Financial Institutions of Bangladesh

From the viewpoint of reporting entity, Financial statements are the means of reporting economic activities of an enterprise to its stakeholders. From the viewpoint of stakeholders, it is a source of reliable financial information for taking economic decision.

The Banking Companies Act 1991 with the latest amendments is considered as the base documents in Bangladesh for banks in fixing disclosure requirements in the financial statements. Apart from this, disclosure is also guided by Acts, Ordes, Circulars, standards given by BB, SEC, DSE, CSE, RJSCF and ICAB. Moreover, Islamic banks follow the provisions of AAOIFI and IFSB.

As the regulator of the accountancy profession in Bangladesh, ICAB currently adopts International financial Reporting Standards(IFRSs)as Bangladesh financial Reporting Standards (BFRSS) for Bangladeshi companies. CAB has already adopted eight IFRS ass BFRSs in Bangladesh . However ICAB is not the regulator of Companies operated in Bangladesh. As a result ICAB cannot enforce the companies to follow IFRS to prepare their corporate financial statements. But SEC regulates all listed banking companies like other listed companies. Rule 12 of Securities Exchange Rule(SER)1987 depicts that the financial statements of an issuer of a listed security shall be prepared in accordance with requirements laid down in the International Accounting Standards (now IFRS) as adopted by the ICAB. Besides, there is a notification of SEC requiring all listed companies to comply with the Bangladesh Accounting Standards as adopted by the ICAB.

Therefore, compliance with the IFRSs is mandatory for the companies listed on DSE and/or CSE. In addition, the DSE and CSE can impose requirements for their listed banking companies too. RJSCF accords registration and ensures lawful administration of the entities. Banking companies registered with RJSCF are to follow the provisions of the Companies Act 1994. Furthermore, BRPD Circular on revised Regulatory Capital Framework for banks in line with Basel III  issued  and guidelines on the Specimen Reports and Financial Statements for Banks under Islamic Shariah issued in November 2009 are important for banks in preparing their financial statements.

IFRS  7 replaces IAS 30 disclosures in financial statements. It aims to bring all types of entities in a single standard.

A complete set of financial statements includes the following five components:

The completed set of financial statements contain five statements and five elements. Here are the five statements:

1.      Statement of Financial Position or Balance Sheet,

2.      Statement of Financial Performance, or Income Statement,

3.      Statement of Change in Equity,

4.      Statement of Cash flow, and

5.      Accounting policies and explanatory notes

NB:  The IASB is an independent accounting standard-setting body, based in London. It consists of 15 members from multiple countries, including the United States. The IASB began operations in 2001 when it succeeded the International Accounting Standards Committee. It is responsible for developing International Financial Reporting Standards (IFRS Standards), previously known as International Accounting Standards (IAS) and promoting the use and application of these standards

 For detail format, pls visit format of statements