Financial statements are prepared according to international standards albeit with national governing boards agreed guidelines. In order to understand these guidelines, it helps to understand the objectives of financial reporting.

The Value Added Tax Act (VATA or the Law), 2007 governs the administration of VAT in Nigeria. VAT is levied at each stage of the production chain at 5% of the value of the taxable good or service¹ supplied, but it is eventually borne by the final consumer, being a consumption tax.