Presentation of Financial Statements - IAS 1 Compilation and Summary: Jairo Flórez Franco Financial Accounting Specialist at the Pontificia

Universidad Javeriana April 2008 Bogotá, Colombia IAS 1 - Objective Establish the basis for the presentation of general purpose financial statements in order to ensure comparability both with previous years, as with other compan ies. To achieve this goal, the rule provides: • General considerations • Guideli nes for the submission to determine its structure • Minimum requirements to publ ish content recognition, valuation and presentation IAS 1 - Reach for the submission applies to all types of financial statements fo r purposes of general information, prepared and presented under IFRS, both conso lidated and individual. Applies to all types of businesses, including banks and insurance companies. Financial institutions must also comply with IAS 30 "Disclo sures ..." Applies to interim financial statements, paragraphs 13-41 (the other applies IAS 34 "Interim Financial Reporting"). SMEs have their own NICs. Purpose • structured representation of the financial position and transactions u ndertaken by the company. • Useful for a wide range of users in making economic decisions. • Provide information about the following elements: assets, liabiliti es, equity, income and expenditure and cash flows. Responsibility for the prepar ation and presentation: Body of directors or equivalent formulation Maximum term : 6 months Fair presentation and compliance with IAS • The correct application o f IAS will result, in practice, in financial statements that present the true im age. • To declare that the financial statements follow the NIC must meet all req uirements of those Standards. • Failure to observe any requirement, should be re ported, indicating the rule which has failed to comply and financial impact on t he balance sheet, results and cash flows. Components of EE FF A complete set of EE FF includes: e) f) g) h) i) Income Statement Balance Sheet Statement of changes in equity Cash flow statement Notes to include accounting p olicies Many companies submit additional reports relating to the financial development o f the institution and major uncertainties. Also present environment. information Accounting Policies: • Enterprise Management should select and apply accounting policies that ensure that financial statements comply with all requirements of t he NICs. • The accounting policies adopted must ensure information: • Comparable RELEVANT E • Complete • Clear • Shape • Essence of identifiable transactions or events that reflect the true image • Present • reflect the economic substance of the facts or transactions • They are neutral (free from prejudice or bias) • • are complete are prudent significant at the extremes Reliable (EE FF) Uniformity: It is necessary to change the amounts for the coming years if signif icant changes to preserve the uniformity of the presentation Materiality and agg regation of data: Each heading with sufficient relative importance should be fil ed separately. Consignments of negligible amounts should be grouped with others of similar nature or function. Compensation: Just where explicitly ruled by both the active NIC (expense) as to the liability (income). If both the asset (or ex penditure) and passive (or income) are not significant comparative information: In general, all numerical information in the financial statements (including not

es) for the year must be accompanied by comparative figures for the previous yea r Rating: The company may have or not current assets and current liabilities as se parate classifications. When not taken place the previous classification of asse ts and liabilities are presented according to their liquidity. • If current asse ts is cash or a cash equivalent for which use is not restricted. • Your balance is expected to perform, or is held for sale or consumption during the normal ope rating cycle of the company. • It is held primarily for trading purposes or for a short time, and is expected to be realized within 12 months after the balance sheet date. • If current liabilities are expected to be settled in the normal course of carr ying on the business. • If you must be settled within 12 months from the balance sheet date.€• (In case of long-term loans with short maturities are considered as non-current if refinancing agreement before making financial statements) Disclosures • Revenue [Rest breakdown as elected] Operating result. • Financial expenses, results associated tax. Result on ordinary activities. • Extraordinary income minorities. Profit for the year. Breakdown of expenses • According natur e or function • If you opt for breakdown by function should provide information broken down by nature, at least, staff, and depreciation. Classification by nature Revenue Other operating income Change in stocks of PT a nd P in P MP Consumption Staff costs Depreciation Other operating expenses Opera ting income as classified by function Revenue Cost of Sales Gross Margin Operati ng Income Other distribution expenses Administrative expenses Operating income O ther operating expenses • Costs, revenues or charged directly to equity results • Effect of change in ac counting policies or significant errors • Capital transactions, results, dividen ds and reserves of cash flow statements (IAS 7) Utility: Allows you to assess th e ability of the company to generate cash and identify needs for liquidity Displ ay: • • Operating activities Investing activities Financing activities • Methods accepted: • Direct method: Collections and payments by category gross • Indirec t method: Shows the net result in the process of debugging information Additiona l: Restriction of the provision of interest or other notes to the financial stat ements, including the company must: • Present information about the basis for th e development of EEFF accounting policies selected and applied in transactions. • Provide information required by IAS and not included in other components of th e EEFF. • Provide additional information as necessary to reflect the true image • Present the notes to systematically EEFF (cross ref