IAS 1, or International Accounting Standard 1, is a financial reporting standard issued by the International

Accounting Standards Board (IASB). It sets out the guidelines for the presentation of financial
statements, ensuring consistency and comparability across different organizations and jurisdictions. The
standard outlines the basic principles and requirements for preparing and presenting financial
statements, including their overall structure, content, and format.

Here are some key points covered by IAS 1:

Purpose of Financial Statements: IAS 1 states that the primary purpose of financial statements is to
provide information about an entity’s financial position, performance, and cash flows. The information
should be useful for making economic decisions by a wide range of users.

Fair Presentation: Financial statements should present fairly the financial position, performance, and
cash flows of an entity. This requires the use of relevant and reliable information, as well as appropriate
accounting policies and estimates.

Going Concern Assumption: The financial statements are prepared under the assumption that the entity
will continue its operations for the foreseeable future, unless management intends to liquidate the
entity or cease trading.

Accrual Basis of Accounting: IAS 1 requires entities to prepare their financial statements using the
accrual basis of accounting, which recognizes transactions and events when they occur, rather than
when cash is received or paid.

Minimum Components of Financial Statements: The standard specifies the minimum components that
should be included in the financial statements, such as a statement of financial position (balance sheet),
a statement of comprehensive income (income statement), a statement of changes in equity, a
statement of cash flows, and related notes.

Comparative Information: Entities are generally required to present comparative information for the
prior period in their financial statements, allowing users to analyze the changes and trends over time.
Disclosure Requirements: IAS 1 includes specific disclosure requirements that entities must comply with.
These disclosures provide additional information about the entity’s financial position, performance, and
significant accounting policies.

IAS 1 plays a crucial role in promoting transparency and comparability in financial reporting. By following
the standard, entities can provide relevant and reliable information to stakeholders, facilitating better
decision-making and enhancing trust in financial statements. It is important for organizations to stay
updated with any amendments or revisions to IAS 1, as issued by the IASB.