International Financial Reporting Standards

Presentation of Financial
Statements

IAS 1 (Revised)

The views expressed in this presentation are those of the presenter, not necessarily those of the IASB or
IFRS Foundation.
Agenda

• Objective of IAS 1 (Revised)

• Scope of IAS 1 (Revised)
• Objective of Financial Statements
• Components of Financial Statements
• Presentation requirements
International Financial Reporting Standards

Objective

• IAS 1 (Revised)
Objective of IAS 1 (Revised)

• The objective of IAS 1 is to prescribe

the basis for presentation of general
purpose financial statements, to
ensure comparability both with
a) the entity's financial statements
of previous periods and
b) with the financial statements of
other entities.
 Objective of IAS 1 (Revised)
• IAS 1 sets out the overall requirements for
– the presentation of financial statements,
– guidelines for their structure and
– minimum requirements for their
content.
• Standards for recognizing, measuring, and
disclosing specific transactions are
addressed in other Standards and
Interpretations.
International Financial Reporting Standards

Scope

• IAS 1 (Revised)
Scope of IAS 1 (Revised)

• Applies to all general purpose financial

statements based on International
Financial Reporting Standards.
• General purpose financial statements
are those intended to serve users who
are NOT in a position to require financial
reports tailored to their particular
information needs.
International Financial Reporting Standards

Objective of Financial
Statements

• IAS 1 (Revised)
Objective of Financial Statements

• 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.
Objective of Financial Statements
Objective of Financial Statements
International Financial Reporting Standards

Components of
Financial Statements

• IAS 1 (Revised)
 Components of Financial Statements
• A complete set of financial statements should include:
1) Statement of Financial Position ”at the end of the
period”,
2) Single Statement of Profit or Loss and Other
Comprehensive Income “for the period” (or two
statements: Statement of Profit and Loss and Statement
of Other Comprehensive Income),
3) Statement of changes in equity ”for the period”,
4) Statement of Cash Flows “for the period”, and
5) Notes, comprising a summary of accounting policies and
other explanatory notes
Components of Financial Statements

• An entity must also present a statement of

financial position as at the beginning of the
earliest comparative period when:
– an accounting policy is applied retrospectively; or
– items are restated retrospectively; or
– when items are reclassified
Components of Financial Statements
International Financial Reporting Standards

Presentation
Requirements

• IAS 1 (Revised)
 Presentation Requirements
♣ General Features
♣ Statement of Financial Position
♣ Statement of Profit or Loss and Other Comprehensive income
♣ Statement of Cash Flows
♣ Statement of Change in Equity
♣ Notes to The Financial Statements
International Financial Reporting Standards

General Features
• Presentation requirements
General Features
General Features
General Features
• In extremely rare cases compliance with an IFRS
requirement would be so misleading as to conflict with the
objective of financial statements set out in “The Framework”
• Rebuttable presumption – there is no conflict where other
entities in similar circumstances comply with the requirement
General Features
General Features
General Features
General Features
General Features
General Features
General Features
International Financial Reporting Standards

Statement of Financial
Position
• Presentation requirements
Statement of Financial Position
Statement of Financial Position
Statement of Financial Position
Statement of Financial Position
• If a liability has become payable on demand because an
entity has breached an undertaking under a long-term loan
agreement on or before the reporting date, the liability is
CURRENT, even if the lender has agreed, after the
reporting date and before the authorization of the
financial statements for issue, NOT to demand payment as
a consequence of the breach.
• However, the liability is classified as NON-CURRENT if the
lender agreed by the reporting date to provide a period of
grace ending at least 12 months after the end of the reporting
period, within which the entity can rectify the breach and
during which the lender cannot demand immediate
repayment.
Statement of Financial Position
Statement of Financial Position
• IAS 1 does NOT prescribe the format of the
Statement of Financial Position. Assets can be
presented current then noncurrent, or vice versa, and
liabilities and equity can be presented current then
noncurrent then equity, or vice versa. A net asset
presentation (assets minus liabilities) is allowed.
• Certain items (“line items”) must be shown on the face
of the statement of financial position as a minimum:
– additional line items, headings and sub-totals are presented
when relevant to an understanding of financial position;
International Financial Reporting Standards

Statement of Profit or
Loss and Other
Comprehensive Income
• Presentation requirements
Statement of Profit or Loss and other
Comprehensive Income

Total Comprehensive
income for a period
Statement of Profit or Loss and other
Comprehensive Income
• All items of income and expense
recognized in a period must be included in
profit or loss unless a Standard or an
Interpretation requires otherwise.
• Some IFRSs require or permit that some
components to be excluded from profit or
loss and instead to be included in other
comprehensive income.
Statement of Profit or Loss and other
Comprehensive Income
Statement of Profit or Loss and other
Comprehensive Income
Statement of Profit or Loss and other
Comprehensive Income
• No items may be presented in the statement of profit or
loss and other comprehensive income (or in the statement
of profit or loss, if separately presented) or in the notes as
‘extraordinary items’.
• Expenses recognized in profit or loss should be analyzed
either by nature (raw materials, staffing costs,
depreciation, etc.) or by function (cost of sales, selling,
administrative, etc).
• If an entity categorizes by function, then additional
information on the nature of expenses – at a minimum
depreciation, amortization and employee benefits expense
– must be disclosed.
Statement of Profit or Loss and other
Comprehensive Income
Revenue X
Expenses (X)
Share of profit of associate X
Profit before tax X
Income tax expense (X)
Profit from continuing ops X
Loss from discontinued ops (X)
PROFIT FOR THE YEAR X
May be two separate
statements
Other comprehensive income:
AFS assets X
Revaluation (X)
OCI before tax X
Tax relating to OCI (X)
OCI after tax X
TOTAL COMPREHENSIVE INCOME X

IAS 1
Statement of Profit or Loss and other
Comprehensive Income
Revenue X
Expenses (X)
Share of profit of associate X
Profit before tax X
Income tax expense (X)
Profit from continuing ops X
Loss from discontinued ops (X)
PROFIT FOR THE YEAR X
Other comprehensive income:
AFS assets X
Revaluation (X) These are analysed into amounts
OCI before tax X attributable to owners of the parent
and to the NCI
Tax relating to OCI (X)
OCI after tax X
TOTAL COMPREHENSIVE INCOME X

IAS 1
Statement of Profit or Loss and other
Comprehensive Income
Revenue X
Expenses (X)
Share of profit of associate X
Profit before tax X
Income tax expense (X)
Profit from continuing ops X
Loss from discontinued ops (X)
PROFIT FOR THE YEAR X
Other comprehensive income:
AFS assets X The components of
OCI could also be
Revaluation (X)
presented as net of tax
OCI before tax X amounts rather than
Tax relating to OCI (X) gross with tax
OCI after tax X deducted
TOTAL COMPREHENSIVE INCOME X

IAS 1
International Financial Reporting Standards

Statement of Cash
Flows
• Presentation requirements
Statement of Cash Flows
International Financial Reporting Standards

Statement of Changes
in Equity
• Presentation requirements
Statement of Changes in Equity
Statement of Changes in Equity
Sh. cap. Ret. CTD AFS CFH Total NCI Total equity
earn’s
Balance b/f X X X X X X X X
Changes in acc policy
(X) (X) (X) (X)
Restated X X X X X X X X
Changes in equity in
year:
Share issue X X
Dividends (X) (X) (X)
Total comprehensive
income
X X X X X X X

Balance c/f X X X X X X X X

Disclosed in Statement of profit or loss and other

comprehensive income
 Statement of Changes in Equity
• The amount of dividends recognised as distributions to
owners during the period, and the related amount per
share must be disclosed either in the statement of
changes in equity or in the notes
International Financial Reporting Standards

Notes to the Financial

Statements
• Presentation requirements
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements
Notes to the Financial Statements

• Capital Disclosures
– An entity should disclose information about its
objectives, policies and processes for managing
capital.