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IAS 1 – Presentation of
financial statements
Agenda/Contents
• What is materiality?
- Omission or misstatement of items that could, individually or
collectively, influence the economic decisions of users taken on the
basis of the financial statements
- It depends on the size and nature (or combination) of the omission
or misstatement
- It has to be judged in the surrounding circumstances
Name
•
Period
covered
Presentation
currency
and level of
rounding
- the total of assets classified as held for sale and assets included in
disposal groups;
- trade and other payables;
- provisions;
- financial liabilities;
- liabilities and assets for current tax;
- deferred tax liabilities/assets;
- liabilities included in disposal groups classified as held for sale;
- non-controlling interests, presented within equity; and
- issued capital and reserves attributable to equity holders of the
parent
• The statement of financial position shall also include line items that
present the following amounts:
- total assets classified as held for sale and assets included in
disposal groups classified as held for sale; and
- liabilities included in disposal group
• When items of income and expense are material, their nature and
amount shall be disclosed separately
• Expenses should be classified by their nature or function within the
entity, whichever provides information that is reliable and more
relevant
Aggregated by nature:
• E.g. depreciation, purchases of materials, transport costs, employee
benefits and advertising costs
• These are not reallocated among various functions within the entity
• Simple to apply because no allocations of expenses to functional
classifications are necessary
IAS 1 – Presentation of financial statements July 2017
PwC Slide 43
Information to be presented in the statement of
comprehensive income - continued
Aggregated by Function:
• Classifies expenses according to their function as part of cost of sales
• E.g. the costs of distribution or administrative activities
• This method can provide more relevant information to users than the
classification of expenses by nature
• However it may require arbitrary allocations and involve
considerable judgement
• In Malta, it is however the one used in practice
• Notes must be
presented in a
systematic manner
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