Notes on IAS 1 - Presentation of Financial Statements Examples of circumstances that result in material

information being obscured:

Objective  language used is vague or unclear
- To ensure comparability both with the entity’s financial  information is scattered throughout the
statements of previous periods and with the financial financial statements
statements of other entities.  dissimilar information are
inappropriately aggregated
Overview  similar information are inappropriately
- It sets out overall requirements for the presentation of disaggregated
financial statements, guidelines for their structure and  material information being hidden by
minimum requirements for their content. immaterial information

Scope How to assess whether information could

- Applicable for profit-oriented entities and public sector influence decisions made by the primary users?
business entities that prepares the following: The reporting entity must consider the ff.:
 General purpose financial statements  Characteristics of primary users
 Interim financial statement (only p. 15 -35 are  Reporting entity’s own circumstances.
applicable, mostly on IAS 34)
 Consolidated financial statements (IAS 10) Primary users of general purpose financial
 Separate financial statements (IAS 27) statements
- Cannot require reporting entities to provide
information directly to them and must rely on
Definitions
general purpose financial statements for much
General purpose financial statements
of the financial information they need.
- Also called as financial statements
- to whom general purpose financial statements
- Intended to meet the needs of users who are
are directed.
not in a position to require an entity to prepare
reports tailored to their particular information
Examples of primary users
needs
 existing and potential investors
 lenders and other creditors
Impracticable
- Happens when the entity cannot apply it after
Characteristics of primary users
making every reasonable effort to do so.
 have a reasonable knowledge of
business and economic activities and
International Financial Reporting Standards
 review and analyse the information
- Standards and Interpretations issued by the
diligently.
International Accounting Standards Board
- Comprise of the following
Notes
 International Financial Reporting
- contain information in addition to that presented in
Standards
the statement of financial position, statement(s) of
 International Accounting Standards
profit or loss and other comprehensive income,
 IFRIC Interpretations
statement of changes in equity and statement of
 SIC Interpretations
cash flows.
- provide narrative descriptions or disaggregations
Material
of items presented in those statements
- omitting, misstating, or obscuring it could
- provide information about items that do not qualify
reasonably be expected to influence decisions
for recognition in those statements.
that the primary users of general purpose
financial statements make on the basis of
Other comprehensive income
those financial statements
- comprises items of income and expense (including
- depends on the nature or magnitude of
reclassification adjustments) that are not
information, or both
recognised in profit or loss as required or permitted
- entity must assess the materiality of
by other IFRSs.
information in the context of its financial
statements taken as a whole.
Components of other comprehensive income
include:
Obscured information
o changes in revaluation surplus
- Information communicated in a way that
would have a similar effect for primary o remeasurements of defined benefit plans
users of financial statements to omitting or o gains and losses arising from translating the
misstating that information. financial statements of a foreign operation
 o gains and losses from investments in equity
instruments designated at fair value through
other comprehensive income
o gains and losses on financial assets measured
at fair value through other comprehensive
income
o the effective portion of gains and losses on
hedging instruments in a cash flow hedge
o gains and losses on hedging instruments that
hedge investments in equity instruments
measured at fair value through other
comprehensive income
o amount of the change in fair value of particular
liabilities designated as at fair value through
profit or loss that is attributable to changes in
the liability’s credit risk
o changes in the value of the time value of
options
o changes in the value of the forward elements
of forward contracts
o insurance finance income and expenses that
are excluded from profit or loss
o finance income and expenses from
reinsurance contracts held excluded from
profit or loss
Owners
- holders of instruments classified as equity
Profit or loss
- total of income less expenses, excluding the
components of other comprehensive income.
Reclassification adjustments
- amounts reclassified to profit or loss in the current
period that were recognised in other
comprehensive income in the current or previous
periods
Total comprehensive income
- change in equity during a period resulting from
transactions and other events, other than those
changes resulting from transactions with owners in
their capacity as owners.
- comprises all components of ‘profit or loss’ andof
‘other comprehensive income’.
Financial statements
- structured representation of the financial position and
financial performance of an entity.
Objective of financial statements
o To provide information about the financial
position, financial performance and cash flows
of an entity that is useful to a wide range of
users in making economic decisions.
o To show the results of the management’s
stewardship of the resources entrusted to it.
Information provided by the financial statement
o Assets
o liabilities;
o equity;
o income and expenses, including gains and
losses;
o contributions by and distributions to owners in
their capacity as owners
o cash flows.
Use of information in the financial statement
- It assists users of financial statements in
predicting the entity’s future cash flows
and, in particular, their timing and
certainty.
Complete set of financial statements
o statement of financial position as at the end of
the period
o statement of profit or loss and other
comprehensive income for the period
o statement of changes in equity for the period
o statement of cash flows for the period
o notes comprising of the following:
 significant accounting policies
 other explanatory information
 comparative information in respect of
the preceding period
o statement of financial position as at the
beginning of the preceding period whenever
 an entity applies an accounting policy
retrospectively
 an entity makes a retrospective
restatement of items in its financial
statements,
 an entity reclassifies items in its
financial statements
Presentation of Statement of Comprehensive
Income
o If profit or loss and other comprehensive
income are presented in a single statement
 Use the title ‘statement of profit or loss
and other comprehensive income’ or
‘statement of comprehensive income
 The profit or loss and other
comprehensive income are presented
in two sections. The sections shall be
presented together, with the profit or
loss section presented first followed
directly by the other comprehensive
income section.
o If profit or loss and other comprehensive
income are presented separately
 the separate statement of profit or loss
shall immediately precede the
statement presenting comprehensive
income, which shall begin with profit or
loss.
Presentation of financial statements
 o An entity shall present with equal prominence
all of the financial statements in a complete set
of financial statements.
Other reports or statements that entities may
present that are outside the scope of IFRSs
o a financial review by management that
describes and explains the main features of
the entity’s financial performance and financial
position, and the principal uncertainties it
faces.
 the main factors and influences
determining financial performance,
 changes in the environment in which
the entity operates
 the entity’s response to those changes
and their effect,
 the entity’s policy for investment to
maintain and enhance financial
performance, including its dividend
policy
 the entity’s sources of funding and its
targeted ratio of liabilities to equity
 the entity’s resources not recognised
in the statement of financial position in
accordance with IFRSs.
o environmental reports or value added
statements, particularly in industries in which
environmental factors are significant and when
employees are regarded as an important user
group.
General features of financial statements
 Fair presentation and compliance with IFRSs
o Financial statements shall present fairly the
financial position, financial performance and
cash flows of an entity.
Fair presentation
o requires the faithful representation of the
effects of transactions, other events and
conditions in accordance with the definitions
and recognition criteria for assets, liabilities,
income and expenses set out in the
Conceptual Framework
How to achieve fair representation?
o through compliance with applicable IFRSs with
additional disclosure when necessary
 An entity whose financial statements
comply with IFRSs shall make an
explicit and unreserved statement of
such compliance in the notes.
 An entity shall not describe financial
statements as complying with IFRSs
unless they comply with all the
requirements of IFRSs.
o By selecting and applying accounting policies
in accordance with IAS 8 Accounting Policies,
Changes in Accounting Estimates and Errors.
 An entity cannot rectify inappropriate
accounting policies either by
disclosure of the accounting policies
used or by notes or explanatory
material.
o By presenting information, including
accounting policies, in a manner that provides
relevant, reliable, comparable and
understandable information.
o By providing additional disclosures when
compliance with the specific requirements in
IFRSs is insufficient to enable users to
understand the impact of particular
transactions, other events and conditions on
the entity’s financial position and financial
performance.
Can the management depart from the
requirements set by the standards?
o In the extremely rare circumstances in which
management concludes that compliance with
a requirement in an IFRS would be so
misleading that it would conflict with the
objective of financial statements set out in the
Conceptual Framework, the entity shall depart
from that requirement in the manner set out in
paragraph 20 if the relevant regulatory
framework requires, or otherwise does not
prohibit, such a departure.
Required disclosures when an entity departs from
the requirements set by the standards and the
relevant regulatory framework DOES NOT
PROHIBIT
 Disclosure that management has concluded
that the financial statements present fairly the
entity’s financial position, financial
performance and cash flows;
 Disclosure that it has complied with applicable
IFRSs, except that it has departed from a
particular requirement to achieve a fair
presentation;
 the title of the IFRS from which the entity has
departed, the nature of the departure,
including the treatment that the IFRS would
require, the reason why that treatment would
be so misleading in the circumstances that it
would conflict with the objective of financial
statements set out in the Conceptual
Framework, and the treatment adopted
 for each period presented, the financial effect
of the departure on each item in the financial
statements that would have been reported in
complying with the requirement.
o When an entity has departed from a
requirement of an IFRS in a prior
period, and that departure affects the
amounts recognised in the financial
statements for the current period, it
shall make the disclosures
.
Required disclosures when an entity departs from
the requirements set by the standards and the
relevant regulatory framework PROHIBITS
  the title of the IFRS in question, the nature of
the requirement, and the reason why
management has concluded that complying
with that requirement is so misleading in the
circumstances that it conflicts with the
objective of financial statements set out in the
Conceptual Framework;
 for each period presented, the adjustments to
each item in the financial statements that
management has concluded would be
necessary to achieve a fair presentation.
Things to consider in assessing whether
complying with a specific requirement in an IFRS
would be so misleading that it would conflict with
the objective of financial statements set out in the
Conceptual Framework
 Why the objective of financial statements is
not achieved in the particular circumstances;
 how the entity’s circumstances differ from
those of other entities that comply with the
requirement.
o If other entities in similar
circumstances comply with the
requirement, there is a rebuttable
presumption that the entity’s
compliance with the requirement
would not be so misleading that it
would conflict with the objective of
financial statements set out in the
Conceptual Framework.
 Going concern
o An entity shall prepare financial statements on
a going concern basis unless management
either intends to liquidate the entity or to cease
trading or has no realistic alternative but to do
so.
Disclosures needed when an entity does not
prepare financial statements on a going
concern basis
 material uncertainties related to events
or conditions that may cast significant
doubt upon the entity’s ability to
continue as a going concern found
through management’s assessment
 basis on which it prepared the
financial statements
 the reason why the entity is not
regarded as a going concern.
Things that the management must consider in
assessing whether the going concern
assumption is appropriate
 All available information about the
future, which is at least, but is not
limited to, twelve months from the end
of the reporting period.
 The degree of consideration
depends on the facts in each
case.
Example:
o When an entity has a history of profitable
operations and ready access to financial
resources
 The entity may reach a conclusion that
the going concern basis of accounting
is appropriate without detailed
analysis.
o In most cases,
 Management may need to consider a
wide range of factors relating to the
following before it can satisfy itself that
the going concern basis is
appropriate.
 current and expected
profitability,
 debt repayment schedules
 potential sources of
replacement financing Accrual
basis of accounting
 Accrual basis of accounting
o An entity shall prepare its financial statements,
except for cash flow information,using the
accrual basis of accounting.
How to apply accrual basis?
 An entity recognises items as ssets,
liabilities, equity, income and
expenses when they satisfy the
definitions and recognition criteria for
those elements in the Conceptual
Framework.
 Materiality and aggregation
o An entity shall present separately
 each material class of similar items.
 items of a dissimilar nature or function
unless they are immaterial.
 Offsetting
o An entity shall not offset assets and liabilities
or income and expenses, unless required or
permitted by an IFRS.
Note:
o Measuring assets net of valuation
allowances—for example,
obsolescence allowances on
inventories and doubtful debts
allowances on receivables—is not
offsetting.
o Revenues incidental to the main
revenue-generating activities, such as
trade discounts and volume rebates
can be netted with related expenses
arising on the same transaction when
this presentation reflects the
substance of the transaction or other
event.

Other similar circumstances
o an entity presents gains and losses on
the disposal of non-current assets,
including investments and operating
assets, by deducting from the amount
of consideration on disposal the
carrying amount of the asset and
related selling expenses
o an entity may net expenditure related
to a provision that is reimbursed under
a contractual arrangement with a third
party against the related
reimbursement.
o an entity presents on a net basis gains
and losses arising from a group of
similar transactions, for example,
foreign exchange gains and losses or
gains and losses arising on financial
instruments held for trading, only when
they are immaterial.
 Frequency of reporting
o An entity shall present a complete set of
financial statements (including comparative
information) at least annually.
Disclosure needed when an entity changes
the end of its reporting period and presents
financial statements for a period longer or
shorter than one year
 the reason for using a longer or
shorter period
 the fact that amounts presented in the
financial statements are not entirely
comparable.
 Comparative information
Minimum comparative information
 Except when IFRSs permit or require
otherwise, an entity shall present comparative
information in respect of the preceding period
for all amounts reported in the current period’s
financial statements.
o An entity shall include comparative
information for narrative and
descriptive information if it is relevant
to understanding the current period’s
financial statements.
 An entity shall present, as a minimum, two
statements of financial position, two
statements of profit or loss and other
comprehensive income, two separate
statements of profit or loss (if presented), two
statements of cash flows and two statements
of changes in equity, and related notes.
 Narrative information provided in the financial
statements for the preceding period(s) must
still be disclosed if it continues to be relevant
in the current period.
Additional comparative information
 An entity may present comparative information in
addition to the minimum comparative financial
statements required by IFRSs, as long as that
information is prepared in accordance with IFRSs.
 This comparative information may consist of one
or more statements, but need not comprise a
complete set of financial statements.When this is
the case, the entity shall present related note
information for those additional statements.
Change in accounting policy, retrospective
restatement or reclassification
 An entity shall present a third statement of
financial position as at the beginning of the
preceding period in addition to the minimum
comparative financial statements required if:
o it applies an accounting policy
retrospectively, makes a retrospective
restatement of items in its financial
statements or reclassifies items in its
financial statements
o the retrospective application,
retrospective restatement or the
reclassification has a material effect
on the information in the statement of
financial position at the beginning of
the preceding period.
When the above situation happens, the
following must be presented:
o Statements of financial position must
be presented as at:
 the end of the current period
 the end of the preceding
period; and
 the beginning of the preceding
period.
o Disclosure of the following information
if reclassification can be done:
 the nature of the
reclassification
 the amount of each item or
class of items that is
reclassified
 reason for the reclassification
o Disclosure of the following information
of reclassification is impracticable
 the reason for not
reclassifying the amounts
 the nature of the adjustments
that would have been made if
the amounts had been
reclassified.
o A related note to the opening
statement of financial position as at
the beginning of the preceding period,
if needed.
 The date of that opening
statement of financial position
shall be as at the beginning of
the preceding period
 regardless of whether an
entity’s financial statements
present comparative
information for earlier periods.
 Consistency of presentation
- An entity shall retain the presentation and classification
of items in the financial statements from one period to
the next unless:
o it is apparent, following a significant change in
the nature of the entity’s operations or a
review of its financial statements, that another
presentation or classification would be more
appropriate having regard to the criteria for the
selection and application of accounting
policies in IAS 8
o an IFRS requires a change in presentation.
Identification of the financial statements
An entity shall display the following information
prominently in the financial statements, and repeat
it when necessary for the information presented to
be understandable:
o the name of the reporting entity or other
means of identification, and any change in that
information from the end of the preceding
reporting period;
o whether the financial statements are of an
individual entity or a group of entities;
o the date of the end of the reporting period or
the period covered by the set of financial
statements or notes;
o the presentation currency
o the level of rounding used in presenting
amounts in the financial statements.
Statement of financial position
Information to be presented in the statement of
financial position
o property, plant and equipment
o investment property
o intangible assets
o financial assets
o investments accounted for using the equity
method
o biological assets
o inventories
o trade and other receivables
o cash and cash equivalents
o the total of assets classified as held for sale
and assets included in disposal groups
classified as held for sale
o trade and other payables
o provisions
o financial liabilities (excluding amounts shown
under (k) and (l))
o liabilities and assets for current tax
o deferred tax liabilities and deferred tax assets,
o liabilities included in disposal groups classified
as held for sale
o non-controlling interests, presented within
equity
o issued capital and reserves attributable to
owners of the parent.
What are the other things that must be presented?
o An entity shall present additional line items
headings and subtotals in the statement of
financial position when such presentation is
relevant to an understanding of the entity’s
financial position.
How should the subtotals be presented?
o comprised of line items made up of amounts
recognised and measured in accordance with
IFRS
o presented and labelled in a manner that
makes the line items that constitute the
subtotal clear and understandable
o consistent from period to period
o not displayed with more prominence than the
subtotals and totals required in IFRS for the
statement of financial position.
Note:
o When an entity presents current and
non-current assets, and current and
non-current liabilities, as separate
classifications in its statement of financial
position, it shall not classify deferred tax
assets (liabilities) as current assets (liabilities).
This Standard does not prescribe the order or format in
which an entity
presents items. Paragraph 54 simply lists items that are
sufficiently different
in nature or function to warrant separate presentation in
the statement of
financial position. In addition:
(a) line items are included when the size, nature or
function of an item or
aggregation of similar items is such that separate
presentation is
relevant to an understanding of the entity’s financial
position; and
(b) the descriptions used and the ordering of items or
aggregation of
similar items may be amended according to the nature of
the entity
and its transactions, to provide information that is relevant
to an
understanding of the entity’s financial position. For
example, a
financial institution may amend the above descriptions to
provide
information that is relevant to the operations of a financial
institution.
An entity makes the judgement about whether to present
additional items
separately on the basis of an assessment of:
(a) the nature and liquidity of assets;
(b) the function of assets within the entity; and identifiable operating cycle .
(c) the amounts, nature and timing of liabilities. In applying paragraph 60, an entity is permitted to present
55 some of its assets
55A and liabilities using a current/non-current classification and
56 others in order of
57 liquidity when this provides information that is reliable and
58 more relevant.
IAS 1 The need for a mixed basis of presentation might arise
A952 © IFRS Foundation when an entity has
The use of different measurement bases for different diverse operations.
classes of assets suggests Information about expected dates of realisation of assets
that their nature or function differs and, therefore, that an and liabilities is
entity presents useful in assessing the liquidity and solvency of an entity.
them as separate line items. For example, different classes IFRS 7 Financial
of property, plant Instruments: Disclosures requires disclosure of the
and equipment can be carried at cost or at revalued maturity dates of financial
amounts in accordance assets and financial liabilities. Financial assets include
with IAS 16. trade and other
Current/non-current distinction receivables, and financial liabilities include trade and other
An entity shall present current and non-current assets, and payables.
current and Information on the expected date of recovery of
non-current liabilities, as separate classifications in its non-monetary assets such as
statement of inventories and expected date of settlement for liabilities
financial position in accordance with paragraphs 66–76 such as provisions is
except when a also useful, whether assets and liabilities are classified as
presentation based on liquidity provides information that is current or as
reliable and non-current. For example, an entity discloses the amount
more relevant. When that exception applies, an entity shall of inventories that
present all 59
assets and liabilities in order of liquidity. 60
Whichever method of presentation is adopted, an entity 61
shall disclose the 62
amount expected to be recovered or settled after more 63
than twelve months 64
for each asset and liability line item that combines amounts 65
expected to be IAS 1
recovered or settled: © IFRS Foundation A953
(a) no more than twelve months after the reporting period, are expected to be recovered more than twelve months
and after the reporting
(b) more than twelve months after the reporting period. period.
When an entity supplies goods or services within a clearly Current assets
identifiable An entity shall classify an asset as current when:
operating cycle, separate classification of current and (a) it expects to realise the asset, or intends to sell or
non-current assets and consume it, in its
liabilities in the statement of financial position provides normal operating cycle;
useful information by (b) it holds the asset primarily for the purpose of trading;
distinguishing the net assets that are continuously (c) it expects to realise the asset within twelve months after
circulating as working the
capital from those used in the entity’s long-term operations. reporting period; or
It also highlights (d) the asset is cash or a cash equivalent (as defined in
assets that are expected to be realised within the current IAS 7) unless the
operating cycle, and asset is restricted from being exchanged or used to settle a
liabilities that are due for settlement within the same liability
period. for at least twelve months after the reporting period.
For some entities, such as financial institutions, a An entity shall classify all other assets as non-current.
presentation of assets and This Standard uses the term ‘non-current’ to include
liabilities in increasing or decreasing order of liquidity tangible, intangible and
provides information financial assets of a long-term nature. It does not prohibit
that is reliable and more relevant than a the use of
current/non-current presentation alternative descriptions as long as the meaning is clear.
because the entity does not supply goods or services The operating cycle of an entity is the time between the
within a clearly acquisition of assets
for processing and their realisation in cash or cash overdrafts, and the current portion of non-current financial
equivalents. When the liabilities,
entity’s normal operating cycle is not clearly identifiable, it dividends payable, income taxes and other non-trade
is assumed to be payables. Financial
twelve months. Current assets include assets (such as liabilities that provide financing on a long-term basis (ie are
inventories and trade not part of the
receivables) that are sold, consumed or realised as part of working capital used in the entity’s normal operating cycle)
the normal and are not due
operating cycle even when they are not expected to be for settlement within twelve months after the reporting
realised within twelve period are noncurrent
months after the reporting period. Current assets also liabilities, subject to paragraphs 74 and 75.
include assets held An entity classifies its financial liabilities as current when
primarily for the purpose of trading (examples include they are due to be
some financial assets settled within twelve months after the reporting period,
that meet the definition of held for trading in IFRS 9) and even if:
the current portion (a) the original term was for a period longer than twelve
of non-current financial assets. months, and
Current liabilities (b) an agreement to refinance, or to reschedule payments,
An entity shall classify a liability as current when: on a long-term
(a) it expects to settle the liability in its normal operating basis is completed after the reporting period and before
cycle; the financial
(b) it holds the liability primarily for the purpose of trading; statements are authorised for issue.
(c) the liability is due to be settled within twelve months If an entity expects, and has the discretion, to refinance or
after the roll over an
reporting period; or obligation for at least twelve months after the reporting
(d) it does not have an unconditional right to defer period under an
settlement of the existing loan facility, it classifies the obligation as
liability for at least twelve months after the reporting period non-current, even if it
(see would otherwise be due within a shorter period. However,
paragraph 73). Terms of a liability that could, at the option when refinancing
of the or rolling over the obligation is not at the discretion of the
counterparty, result in its settlement by the issue of equity entity (for example,
instruments do not affect its classification. there is no arrangement for refinancing), the entity does
An entity shall classify all other liabilities as non-current. not consider the
66 potential to refinance the obligation and classifies the
67 obligation as current.
68 When an entity breaches a provision of a long-term loan
69 arrangement on or
IAS 1 before the end of the reporting period with the effect that
A954 © IFRS Foundation the liability
Some current liabilities, such as trade payables and some becomes payable on demand, it classifies the liability as
accruals for current, even if the
employee and other operating costs, are part of the lender agreed, after the reporting period and before the
working capital used in authorisation of the
the entity’s normal operating cycle. An entity classifies financial statements for issue, not to demand payment as a
such operating items consequence of
as current liabilities even if they are due to be settled more the breach. An entity classifies the liability as current
than twelve because, at the end of
months after the reporting period. The same normal the reporting period, it does not have an unconditional right
operating cycle applies to to defer its
the classification of an entity’s assets and liabilities. When settlement for at least twelve months after that date.
the entity’s normal However, an entity classifies the liability as non-current if
operating cycle is not clearly identifiable, it is assumed to the lender agreed
be twelve months. by the end of the reporting period to provide a period of
Other current liabilities are not settled as part of the normal grace ending at least
operating cycle, twelve months after the reporting period, within which the
but are due for settlement within twelve months after the entity can rectify
reporting period or the breach and during which the lender cannot demand
held primarily for the purpose of trading. Examples are immediate
some financial repayment.
liabilities that meet the definition of held for trading in IFRS 70
9, bank 71
72 (ii) the number of shares issued and fully paid, and
73 issued but
74 not fully paid;
75 (iii) par value per share, or that the shares have no par
IAS 1 value;
© IFRS Foundation A955 (iv) a reconciliation of the number of shares
In respect of loans classified as current liabilities, if the outstanding at the
following events occur beginning and at the end of the period;
between the end of the reporting period and the date the 76
financial 77
statements are authorised for issue, those events are 78
disclosed as 79
non-adjusting events in accordance with IAS 10 Events IAS 1
after the Reporting Period: A956 © IFRS Foundation
(a) refinancing on a long-term basis; (v) the rights, preferences and restrictions attaching to
(b) rectification of a breach of a long-term loan that
arrangement; and class including restrictions on the distribution of
(c) the granting by the lender of a period of grace to rectify dividends
a breach of a and the repayment of capital;
long-term loan arrangement ending at least twelve months (vi) shares in the entity held by the entity or by its
after the subsidiaries or
reporting period. associates; and
Information to be presented either in the statement of (vii) shares reserved for issue under options and
financial contracts for the
position or in the notes sale of shares, including terms and amounts; and
An entity shall disclose, either in the statement of (b) a description of the nature and purpose of each
financial position or in reserve within
the notes, further subclassifications of the line items equity.
presented, classified An entity without share capital, such as a partnership
in a manner appropriate to the entity’s operations. or trust, shall
The detail provided in subclassifications depends on the disclose information equivalent to that required by
requirements of IFRSs paragraph 79(a),
and on the size, nature and function of the amounts showing changes during the period in each category
involved. An entity also of equity interest, and
uses the factors set out in paragraph 58 to decide the the rights, preferences and restrictions attaching to
basis of subclassification. each category of equity
The disclosures vary for each item, for example: interest.
(a) items of property, plant and equipment are If an entity has reclassified
disaggregated into classes (a) a puttable financial instrument classified as an
in accordance with IAS 16; equity instrument,
(b) receivables are disaggregated into amounts receivable or
from trade (b) an instrument that imposes on the entity an
customers, receivables from related parties, prepayments obligation to deliver to
and other another party a pro rata share of the net assets of the
amounts; entity only on
(c) inventories are disaggregated, in accordance with IAS liquidation and is classified as an equity instrument
2 Inventories, into between financial liabilities and equity, it shall disclose
classifications such as merchandise, production supplies, the amount
materials, reclassified into and out of each category (financial
work in progress and finished goods; liabilities or equity),
(d) provisions are disaggregated into provisions for and the timing and reason for that reclassification.
employee benefits and Statement of profit or loss and other comprehensive
other items; and income
(e) equity capital and reserves are disaggregated into [Deleted]
various classes, such The statement of profit or loss and other
as paid-in capital, share premium and reserves. comprehensive income (statement
An entity shall disclose the following, either in the of comprehensive income) shall present, in addition to
statement of financial the profit or
position or the statement of changes in equity, or in loss and other comprehensive income sections:
the notes: (a) profit or loss;
(a) for each class of share capital: (b) total other comprehensive income;
(i) the number of shares authorised;
(c) comprehensive income for the period, being the IFRS 17);
total of profit or (c) share of the profit or loss of associates and joint
loss and other comprehensive income. ventures accounted
If an entity presents a separate statement of profit or for using the equity method;
loss it does not (ca) if a financial asset is reclassified out of the
present the profit or loss section in the statement amortised cost
presenting measurement category so that it is measured at fair
comprehensive income. value through
An entity shall present the following items, in addition profit or loss, any gain or loss arising from a
to the profit or loss difference between the
and other comprehensive income sections, as previous amortised cost of the financial asset and its
allocation of profit or fair value at
loss and other comprehensive income for the period: the reclassification date (as defined in IFRS 9);
(a) profit or loss for the period attributable to: 82
80 IAS 1
80A A958 © IFRS Foundation
81 (cb) if a financial asset is reclassified out of the fair
81A value through other
81B comprehensive income measurement category so that
IAS 1 it is measured
© IFRS Foundation A957 at fair value through profit or loss, any cumulative gain
(i) non-controlling interests, and or loss
(ii) owners of the parent. previously recognised in other comprehensive income
(b) comprehensive income for the period attributable that is
to: reclassified to profit or loss;
(i) non-controlling interests, and (d) tax expense;
(ii) owners of the parent. (e) [deleted]
If an entity presents profit or loss in a separate (ea) a single amount for the total of discontinued
statement it shall present operations (see IFRS 5).
(a) in that statement. (f)–(i) [deleted]
Information to be presented in the profit or loss Information to be presented in the other
section or the comprehensive income
statement of profit or loss section
In addition to items required by other IFRSs, the profit The other comprehensive income section shall present
or loss section or line items for the
the statement of profit or loss shall include line items amounts for the period of:
that present the (a) items of other comprehensive income (excluding
following amounts for the period: amounts in
(a) revenue, presenting separately: paragraph (b)), classified by nature and grouped into
(i) interest revenue calculated using the effective those that, in
interest accordance with other IFRSs:
method; and (i) will not be reclassified subsequently to profit or
(ii) insurance revenue (see IFRS 17); loss; and
(aa) gains and losses arising from the derecognition of (ii) will be reclassified subsequently to profit or loss
financial assets when
measured at amortised cost; specific conditions are met.
(ab) insurance service expenses from contracts issued (b) the share of the other comprehensive income of
within the scope associates and joint
of IFRS 17 (see IFRS 17); ventures accounted for using the equity method,
(ac) income or expenses from reinsurance contracts separated into the
held (see IFRS 17); share of items that, in accordance with other IFRSs:
(b) finance costs; (i) will not be reclassified subsequently to profit or
(ba) impairment losses (including reversals of loss; and
impairment losses or (ii) will be reclassified subsequently to profit or loss
impairment gains) determined in accordance with when
Section 5.5 of specific conditions are met.
IFRS 9; [Deleted]
(bb) insurance finance income or expenses from An entity shall present additional line items (including
contracts issued within by disaggregating
the scope of IFRS 17 (see IFRS 17); the line items listed in paragraph 82), headings and
(bc) finance income or expenses from reinsurance subtotals in the
contracts held (see
statement(s) presenting profit or loss and other extraordinary items, in the statement(s) presenting
comprehensive profit or loss and other
income when such presentation is relevant to an comprehensive income or in the notes.
understanding of the Profit or loss for the period
entity’s financial performance. An entity shall recognise all items of income and
When an entity presents subtotals in accordance with expense in a period
paragraph 85, those in profit or loss unless an IFRS requires or permits
subtotals shall: otherwise.
(a) be comprised of line items made up of amounts Some IFRSs specify circumstances when an entity
recognised and recognises particular items
measured in accordance with IFRS; outside profit or loss in the current period. IAS 8 specifies
(b) be presented and labelled in a manner that makes the two such
line items that circumstances: the correction of errors and the effect of
constitute the subtotal clear and understandable; changes in
(c) be consistent from period to period, in accordance with accounting policies. Other IFRSs require or permit
paragraph 45; components of other
and comprehensive income that meet the Conceptual
82A Framework’s definition of
83–84 income or expense to be excluded from profit or loss (see
85 paragraph 7).
85A Other comprehensive income for the period
IAS 1 An entity shall disclose the amount of income tax
© IFRS Foundation A959 relating to each item
(d) not be displayed with more prominence than the of other comprehensive income, including
subtotals and totals reclassification adjustments,
required in IFRS for the statement(s) presenting profit or either in the statement of profit or loss and other
loss and other comprehensive income
comprehensive income. or in the notes.
An entity shall present the line items in the statement(s) An entity may present items of other comprehensive
presenting profit or income either:
loss and other comprehensive income that reconcile any (a) net of related tax effects, or
subtotals presented (b) before related tax effects with one amount shown for
in accordance with paragraph 85 with the subtotals or the aggregate
totals required in IFRS amount of income tax relating to those items.
for such statement(s). 85B
Because the effects of an entity’s various activities, 86
transactions and other 87
events differ in frequency, potential for gain or loss and 88
predictability, 89
disclosing the components of financial performance assists 90
users in 91
understanding the financial performance achieved and in IAS 1
making projections A960 © IFRS Foundation
of future financial performance. An entity includes If an entity elects alternative (b), it shall allocate the tax
additional line items in between the items
the statement(s) presenting profit or loss and other that might be reclassified subsequently to the profit or loss
comprehensive income section and those
and it amends the descriptions used and the ordering of that will not be reclassified subsequently to the profit or
items when this is loss section.
necessary to explain the elements of financial An entity shall disclose reclassification adjustments
performance. An entity relating to components
considers factors including materiality and the nature and of other comprehensive income.
function of the Other IFRSs specify whether and when amounts
items of income and expense. For example, a financial previously recognised in
institution may amend other comprehensive income are reclassified to profit or
the descriptions to provide information that is relevant to loss. Such
the operations of a reclassifications are referred to in this Standard as
financial institution. An entity does not offset income and reclassification
expense items adjustments. A reclassification adjustment is included with
unless the criteria in paragraph 32 are met. the related
An entity shall not present any items of income or component of other comprehensive income in the period
expense as that the adjustment
is reclassified to profit or loss. These amounts may have 94
been recognised in 95
other comprehensive income as unrealised gains in the 96
current or previous 97
periods. Those unrealised gains must be deducted from 98
other comprehensive IAS 1
income in the period in which the realised gains are © IFRS Foundation A961
reclassified to profit or (a) write-downs of inventories to net realisable value or of
loss to avoid including them in total comprehensive income property, plant
twice. and equipment to recoverable amount, as well as reversals
An entity may present reclassification adjustments in the of such
statement(s) of write-downs;
profit or loss and other comprehensive income or in the (b) restructurings of the activities of an entity and reversals
notes. An entity of any
presenting reclassification adjustments in the notes provisions for the costs of restructuring;
presents the items (c) disposals of items of property, plant and equipment;
of other comprehensive income after any related (d) disposals of investments;
reclassification adjustments. (e) discontinued operations;
Reclassification adjustments arise, for example, on (f) litigation settlements; and
disposal of a foreign (g) other reversals of provisions.
operation (see IAS 21) and when some hedged forecast An entity shall present an analysis of expenses
cash flows affect profit recognised in profit or loss
or loss (see paragraph 6.5.11(d) of IFRS 9 in relation to using a classification based on either their nature or
cash flow hedges). their function within
Reclassification adjustments do not arise on changes in the entity, whichever provides information that is
revaluation surplus reliable and more
recognised in accordance with IAS 16 or IAS 38 or on relevant.
remeasurements of Entities are encouraged to present the analysis in
defined benefit plans recognised in accordance with IAS paragraph 99 in the
19. These components statement(s) presenting profit or loss and other
are recognised in other comprehensive income and are not comprehensive income.
reclassified to Expenses are subclassified to highlight components of
profit or loss in subsequent periods. Changes in financial performance
revaluation surplus may be that may differ in terms of frequency, potential for gain or
transferred to retained earnings in subsequent periods as loss and
the asset is used or predictability. This analysis is provided in one of two forms.
when it is derecognised (see IAS 16 and IAS 38). In The first form of analysis is the ‘nature of expense’ method.
accordance with IFRS 9, An entity
reclassification adjustments do not arise if a cash flow aggregates expenses within profit or loss according to their
hedge or the nature (for
accounting for the time value of an option (or the forward example, depreciation, purchases of materials, transport
element of a costs, employee
forward contract or the foreign currency basis spread of a benefits and advertising costs), and does not reallocate
financial them among functions
instrument) result in amounts that are removed from the within the entity. This method may be simple to apply
cash flow hedge because no allocations
reserve or a separate component of equity, respectively, of expenses to functional classifications are necessary. An
and included directly example of a
in the initial cost or other carrying amount of an asset or a classification using the nature of expense method is as
liability. These follows:
amounts are directly transferred to assets or liabilities. Revenue X
Information to be presented in the statement(s) of Other income X
profit or loss Changes in inventories of finished goods and work in
and other comprehensive income or in the notes progress X
When items of income or expense are material, an Raw materials and consumables used X
entity shall disclose Employee benefits expense X
their nature and amount separately. Depreciation and amortisation expense X
Circumstances that would give rise to the separate Other expenses X
disclosure of items of Total expenses (X)
income and expense include: Profit before tax X
92 99
93 100
101 (a) total comprehensive income for the period,
102 showing separately the
IAS 1 total amounts attributable to owners of the parent and
A962 © IFRS Foundation to
The second form of analysis is the ‘function of expense’ or non-controlling interests;
‘cost of sales’ (b) for each component of equity, the effects of
method and classifies expenses according to their function retrospective
as part of cost of application or retrospective restatement recognised in
sales or, for example, the costs of distribution or accordance
administrative activities. At a with IAS 8; and
minimum, an entity discloses its cost of sales under this 103
method separately 104
from other expenses. This method can provide more 105
relevant information to 106
users than the classification of expenses by nature, but IAS 1
allocating costs to © IFRS Foundation A963
functions may require arbitrary allocations and involve (c) [deleted]
considerable (d) for each component of equity, a reconciliation
judgement. An example of a classification using the between the carrying
function of expense amount at the beginning and the end of the period,
method is as follows: separately (as a
Revenue X minimum) disclosing changes resulting from:
Cost of sales (X) (i) profit or loss;
Gross profit X (ii) other comprehensive income; and
Other income X (iii) transactions with owners in their capacity as
Distribution costs (X) owners,
Administrative expenses (X) showing separately contributions by and distributions
Other expenses (X) to
Profit before tax X owners and changes in ownership interests in
An entity classifying expenses by function shall subsidiaries
disclose additional that do not result in a loss of control.
information on the nature of expenses, including Information to be presented in the statement of
depreciation and changes in equity
amortisation expense and employee benefits expense. or in the notes
The choice between the function of expense method and For each component of equity an entity shall present,
the nature of either in the
expense method depends on historical and industry factors statement of changes in equity or in the notes, an
and the nature of analysis of other
the entity. Both methods provide an indication of those comprehensive income by item (see paragraph 106(d)
costs that might vary, (ii)).
directly or indirectly, with the level of sales or production of An entity shall present, either in the statement of
the entity. changes in equity or in
Because each method of presentation has merit for the notes, the amount of dividends recognised as
different types of entities, distributions
this Standard requires management to select the to owners during the period, and the related amount of
presentation that is dividends per
reliable and more relevant. However, because information share.
on the nature of In paragraph 106, the components of equity include, for
expenses is useful in predicting future cash flows, example, each class
additional disclosure is of contributed equity, the accumulated balance of each
required when the function of expense classification is class of other
used. comprehensive income and retained earnings.
In paragraph 104, ‘employee benefits’ has the same Changes in an entity’s equity between the beginning and
meaning as in IAS 19. the end of the
Statement of changes in equity reporting period reflect the increase or decrease in its net
Information to be presented in the statement of assets during the
changes in equity period. Except for changes resulting from transactions with
An entity shall present a statement of changes in owners in their
equity as required capacity as owners (such as equity contributions,
by paragraph 10. The statement of changes in equity reacquisitions of the entity’s
includes the following own equity instruments and dividends) and transaction
information: costs directly related
to such transactions, the overall change in equity during a the understandability and comparability of its financial
period represents statements. An
the total amount of income and expense, including gains entity shall cross-reference each item in the
and losses, generated statements of financial
by the entity’s activities during that period. position and in the statement(s) of profit or loss and
IAS 8 requires retrospective adjustments to effect changes other comprehensive
in accounting income, and in the statements of changes in equity
policies, to the extent practicable, except when the and of cash flows to any
transition provisions in related information in the notes.
another IFRS require otherwise. IAS 8 also requires Examples of systematic ordering or grouping of the notes
restatements to correct include:
errors to be made retrospectively, to the extent practicable. (a) giving prominence to the areas of its activities that the
Retrospective entity considers
adjustments and retrospective restatements are not to be most relevant to an understanding of its financial
changes in equity but they performance
are adjustments to the opening balance of retained and financial position, such as grouping together
earnings, except when an information about
IFRS requires retrospective adjustment of another particular operating activities;
component of equity. (b) grouping together information about items measured
Paragraph 106(b) requires disclosure in the statement of similarly such as
changes in equity of assets measured at fair value; or
the total adjustment to each component of equity resulting (c) following the order of the line items in the statement(s)
from changes in of profit or
accounting policies and, separately, from corrections of loss and other comprehensive income and the statement
errors. These of financial
adjustments are disclosed for each prior period and the position, such as:
beginning of the (i) statement of compliance with IFRSs (see paragraph 16);
period. (ii) significant accounting policies applied (see paragraph
106A 117);
107 (iii) supporting information for items presented in the
108 statements
109 of financial position and in the statement(s) of profit or loss
110 and
IAS 1 other comprehensive income, and in the statements of
A964 © IFRS Foundation changes
Statement of cash flows in equity and of cash flows, in the order in which each
Cash flow information provides users of financial statement and each line item is presented; and
statements with a basis to (iv) other disclosures, including:
assess the ability of the entity to generate cash and cash 111
equivalents and the 112
needs of the entity to utilise those cash flows. IAS 7 sets 113
out requirements for 114
the presentation and disclosure of cash flow information. IAS 1
Notes © IFRS Foundation A965
Structure (1) contingent liabilities (see IAS 37) and unrecognised
The notes shall: contractual commitments; and
(a) present information about the basis of preparation (2) non-financial disclosures, eg the entity’s financial risk
of the financial management objectives and policies (see IFRS 7).
statements and the specific accounting policies used [Deleted]
in accordance An entity may present notes providing information about
with paragraphs 117–124; the basis of
(b) disclose the information required by IFRSs that is preparation of the financial statements and specific
not presented accounting policies as a
elsewhere in the financial statements; and separate section of the financial statements.
(c) provide information that is not presented elsewhere Disclosure of accounting policies
in the financial An entity shall disclose its significant accounting
statements, but is relevant to an understanding of any policies comprising:
of them. (a) the measurement basis (or bases) used in
An entity shall, as far as practicable, present notes in a preparing the financial
systematic manner. statements; and
In determining a systematic manner, the entity shall (b) the other accounting policies used that are relevant
consider the effect on to an
understanding of the financial statements. An entity shall disclose, along with its significant
It is important for an entity to inform users of the accounting policies or
measurement basis or bases other notes, the judgements, apart from those
used in the financial statements (for example, historical involving estimations
cost, current cost, net (see paragraph 125), that management has made in the
realisable value, fair value or recoverable amount) process of applying
because the basis on which the entity’s accounting policies and that have the most
an entity prepares the financial statements significantly significant effect on
affects users’ analysis. the amounts recognised in the financial statements.
When an entity uses more than one measurement basis in In the process of applying the entity’s accounting policies,
the financial management
statements, for example when particular classes of assets makes various judgements, apart from those involving
are revalued, it is estimations, that can
sufficient to provide an indication of the categories of significantly affect the amounts it recognises in the
assets and liabilities to financial statements. For
which each measurement basis is applied. example, management makes judgements in determining:
In deciding whether a particular accounting policy should (a) [deleted]
be disclosed, (b) when substantially all the significant risks and rewards
management considers whether disclosure would assist of ownership
users in of financial assets and, for lessors, assets subject to
understanding how transactions, other events and leases are
conditions are reflected in transferred to other entities;
reported financial performance and financial position. Each (c) whether, in substance, particular sales of goods are
entity considers financing
the nature of its operations and the policies that the users arrangements and therefore do not give rise to revenue;
of its financial and
statements would expect to be disclosed for that type of (d) whether the contractual terms of a financial asset give
entity. Disclosure of rise on specified
particular accounting policies is especially useful to users dates to cash flows that are solely payments of principal
when those policies and interest
are selected from alternatives allowed in IFRSs. An on the principal amount outstanding.
example is disclosure of Some of the disclosures made in accordance with
whether an entity applies the fair value or cost model to its paragraph 122 are required
investment by other IFRSs. For example, IFRS 12 Disclosure of
property (see IAS 40 Investment Property). Some IFRSs Interests in Other Entities
specifically require requires an entity to disclose the judgements it has made
disclosure of particular accounting policies, including in determining
choices made by whether it controls another entity. IAS 40 Investment
management between different policies they allow. For Property requires
example, IAS 16 disclosure of the criteria developed by the entity to
requires disclosure of the measurement bases used for distinguish investment
classes of property, property from owner-occupied property and from property
plant and equipment. held for sale in the
[Deleted] ordinary course of business, when classification of the
An accounting policy may be significant because of the property is difficult.
nature of the entity’s Sources of estimation uncertainty
operations even if amounts for current and prior periods An entity shall disclose information about the
are not material. It is assumptions it makes about
also appropriate to disclose each significant accounting the future, and other major sources of estimation
policy that is not uncertainty at the end of
specifically required by IFRSs but the entity selects and the reporting period, that have a significant risk of
applies in accordance resulting in
with IAS 8. a material adjustment to the carrying amounts of
115 assets and liabilities
116 within the next financial year. In respect of those
117 assets and liabilities,
118 the notes shall include details of:
119 (a) their nature, and
120 (b) their carrying amount as at the end of the reporting
121 period.
IAS 1 Determining the carrying amounts of some assets and
A966 © IFRS Foundation liabilities requires
estimation of the effects of uncertain future events on nature of the assumption and other circumstances.
those assets and Examples of the types of
liabilities at the end of the reporting period. For example, in disclosures an entity makes are:
the absence of (a) the nature of the assumption or other estimation
recently observed market prices, future-oriented estimates uncertainty;
are necessary to (b) the sensitivity of carrying amounts to the methods,
measure the recoverable amount of classes of property, assumptions and
plant and equipment, estimates underlying their calculation, including the
the effect of technological obsolescence on inventories, reasons for the
provisions subject to sensitivity;
the future outcome of litigation in progress, and long-term (c) the expected resolution of an uncertainty and the range
employee benefit of reasonably
liabilities such as pension obligations. These estimates possible outcomes within the next financial year in respect
involve assumptions of the
122 carrying amounts of the assets and liabilities affected; and
123 (d) an explanation of changes made to past assumptions
124 concerning those
125 assets and liabilities, if the uncertainty remains unresolved.
126 This Standard does not require an entity to disclose budget
IAS 1 information or
© IFRS Foundation A967 forecasts in making the disclosures in paragraph 125.
about such items as the risk adjustment to cash flows or Sometimes it is impracticable to disclose the extent of the
discount rates, future possible effects of
changes in salaries and future changes in prices affecting an assumption or another source of estimation uncertainty
other costs. at the end of the
The assumptions and other sources of estimation reporting period. In such cases, the entity discloses that it
uncertainty disclosed in is reasonably
accordance with paragraph 125 relate to the estimates that possible, on the basis of existing knowledge, that
require outcomes within the next
management’s most difficult, subjective or complex financial year that are different from the assumption could
judgements. As the require
number of variables and assumptions affecting the a material adjustment to the carrying amount of the asset
possible future resolution or liability affected.
of the uncertainties increases, those judgements become In all cases, the entity discloses the nature and carrying
more subjective and amount of the specific
complex, and the potential for a consequential material asset or liability (or class of assets or liabilities) affected by
adjustment to the the assumption.
carrying amounts of assets and liabilities normally The disclosures in paragraph 122 of particular judgements
increases accordingly. that management
The disclosures in paragraph 125 are not required for made in the process of applying the entity’s accounting
assets and liabilities policies do not relate
with a significant risk that their carrying amounts might to the disclosures of sources of estimation uncertainty in
change materially paragraph 125.
within the next financial year if, at the end of the reporting 127
period, they are 128
measured at fair value based on a quoted price in an 129
active market for an 130
identical asset or liability. Such fair values might change 131
materially within the 132
next financial year but these changes would not arise from IAS 1
assumptions or A968 © IFRS Foundation
other sources of estimation uncertainty at the end of the Other IFRSs require the disclosure of some of the
reporting period. assumptions that would
An entity presents the disclosures in paragraph 125 in a otherwise be required in accordance with paragraph 125.
manner that helps For
users of financial statements to understand the example, IAS 37 requires disclosure, in specified
judgements that management circumstances, of major
makes about the future and about other sources of assumptions concerning future events affecting classes of
estimation uncertainty. provisions.
The nature and extent of the information provided vary IFRS 13 Fair Value Measurement requires disclosure of
according to the significant assumptions
(including the valuation technique(s) and inputs) the entity IAS 1
uses when © IFRS Foundation A969
measuring the fair values of assets and liabilities that are Puttable financial instruments classified as equity
carried at fair value. For puttable financial instruments classified as equity
Capital instruments, an
An entity shall disclose information that enables users entity shall disclose (to the extent not disclosed
of its financial elsewhere):
statements to evaluate the entity’s objectives, policies (a) summary quantitative data about the amount
and processes for classified as equity;
managing capital. (b) its objectives, policies and processes for managing
To comply with paragraph 134, the entity discloses the its obligation to
following: repurchase or redeem the instruments when required
(a) qualitative information about its objectives, policies and to do so by
processes for the instrument holders, including any changes from
managing capital, including: the previous
(i) a description of what it manages as capital; period;
(ii) when an entity is subject to externally imposed capital (c) the expected cash outflow on redemption or
requirements, the nature of those requirements and how repurchase of that
those class of financial instruments; and
requirements are incorporated into the management of (d) information about how the expected cash outflow
capital; on redemption or
and repurchase was determined.
(iii) how it is meeting its objectives for managing capital. Other disclosures
(b) summary quantitative data about what it manages as An entity shall disclose in the notes:
capital. Some (a) the amount of dividends proposed or declared
entities regard some financial liabilities (eg some forms of before the financial
subordinated debt) as part of capital. Other entities regard statements were authorised for issue but not
capital as recognised as a
excluding some components of equity (eg components distribution to owners during the period, and the
arising from related amount
cash flow hedges). per share; and
(c) any changes in (a) and (b) from the previous period. (b) the amount of any cumulative preference dividends
(d) whether during the period it complied with any not recognised.
externally imposed An entity shall disclose the following, if not disclosed
capital requirements to which it is subject. elsewhere in
(e) when the entity has not complied with such externally information published with the financial statements:
imposed capital (a) the domicile and legal form of the entity, its country
requirements, the consequences of such non-compliance. of
The entity bases these disclosures on the information incorporation and the address of its registered office
provided internally to (or principal
key management personnel. place of business, if different from the registered
An entity may manage capital in a number of ways and be office);
subject to a (b) a description of the nature of the entity’s
number of different capital requirements. For example, a operations and its
conglomerate may principal activities;
include entities that undertake insurance activities and (c) the name of the parent and the ultimate parent of
banking activities and the group; and
those entities may operate in several jurisdictions. When (d) if it is a limited life entity, information regarding the
an aggregate length of its
disclosure of capital requirements and how capital is life.
managed would not
provide useful information or distorts a financial statement
user’
understanding of an entity’s capital resources, the entity
shall disclose
separate information for each capital requirement to which
the entity is
subject.
133
134
135
136