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IAS 1:Presentation of
Financial Statements
 OBJECTIVE
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 IAS 1 prescribes
 the basis for presentation of General Purpose Financial
Statements
 to ensure comparability both with
 the entity’s financial statements of previous periods and
 with the financial statements of other entities.

 It sets out
 overall requirements for the presentation of financial
statements,
 guidelines for their structure and
 minimum requirements for their content.
 SCOPE
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 The requirements of IAS 1 are to be applied

 to all “General Purpose Financial Statements”
 that have been prepared and presented
 in accordance with International Financial Reporting
Standards (IFRS).
 IAS 1 is not applicable to condensed Interim
Financial Statements prepared according to IAS 34.
 Definitions of Key Terms
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 Notes to Financial Statements - A collection of

information providing
 descriptions and disaggregated information relating to
items included in the financial statements as well as
 those that do not appear in the financial statements but are
disclosed due to requirements of IFRS.
 Other Comprehensive Income - comprises
 items of income and expense (including reclassification
adjustments)
 that are not recognized in profit or loss as required or
permitted by other IFRSs.
 Financial Statements
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 To meet this objective, financial statements provide

information about an entity’s:
a) assets;
b) liabilities;
c) equity;
d) income and expenses, including gains and losses;
e) contributions by and distributions to owners in
their capacity as owners; and
f) cash flows.
 General Features
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Fair Presentation and Compliance with

IFRS
 The application of IFRS, with additional disclosure
where required, is expected to result in financial
statements that achieve a “fair presentation.”
 Going Concern
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 Financial statements should be prepared on a

going concern basis unless management intends
to liquidate the entity or cease trading or has no
realistic option but to do so.
 Accrual Basis of Accounting
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 Excluding the Cash Flow Statement, all

other financial statements
 must be prepared on an accrual basis,
 Whereby assets and liabilities are
recognized when they are receivable or
payable rather than when actually received
or paid.
 Consistency of Presentation
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 An entity shall retain the presentation and

classification of items in the financial statements
from one period to the next unless:
a) 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; or
b) an IFRS requires a change in presentation.
 Frequency of Reporting
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 An entity shall present a complete set of financial

statements (including comparative information) at least
annually.
 Structure and Content
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Identification of the Financial Statements

 Financial statements should be clearly identified

from other information in the same published

document (such as an annual report).
 Furthermore, the name of the entity, the period

covered, presentation currency, and so on also must

be displayed prominently.
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12  Financial reporting includes

 Statement of financial position
 Statement of comprehensive income (this may be augmented
by a separate income statement)
 Statement of changes in equity
 Statement of cash flows
 Notes including significant accounting policies and
explanatory information
 Statement of financial position at the beginning of the earliest
comparative period when an entity applies an accounting
policy retrospectively or makes a retrospective restatement
 Statement of Profit or Loss
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 The entity is required to present a statement of profit or

loss consisting of:
1) revenue; gains and losses arising from the de-recognition of
financial assets measured at amortized cost;
2) finance costs;
3) share of the profit or loss of associates and joint ventures
accounted for using the equity method; if a financial asset is
reclassified so that it is measured at fair value, any gain or loss
arising from a difference between the previous carrying amount
and its fair value at the reclassification date (IFRS 9);
4) tax expense; a single amount for the total of discontinued
operations ( IFRS 5).
 Example: Statement of Profit or Loss
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 Example : Statement of Profit or Loss
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 Example: Statement of Profit or Loss
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 Statement of Profit or Loss and OCI
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 The entity shall present the statement of profit

or loss and other comprehensive income
(statement of comprehensive income) consisting
of: :
1. profit or loss;
2. total other comprehensive income;
3. comprehensive income for the period, being the
total of profit or loss and other comprehensive
income.
 Components of OCI
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 The components of other comprehensive income

include:
a) changes in revaluation surplus ( IAS 16 Property, Plant and
Equipment and IAS 38 Intangible Assets);
b) gains and losses arising from translating the financial
statements of a foreign operation ( IAS 21 The Effects of
Changes in Foreign Exchange Rates);
c) gains and losses from investments in equity instruments
measured at fair value through other comprehensive income.
( IFRS 9 Financial Instruments;)
 Components of OCI
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e) the effective portion of gains and losses on hedging

instruments in a cash flow hedge and the gains and
losses on hedging instruments that hedge
investments in equity instruments measured at fair
value through other comprehensive income.( IFRS
9);
f) for particular liabilities designated as at fair value
through profit or loss, the amount of the change in
fair value that is attributable to changes in the
liability’s credit risk. ( IFRS 9);
 Components of OCI
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e) changes in the value of the time value of options when

separating the intrinsic value and time value of an option
contract and designating as the hedging instrument only the
changes in the intrinsic value (IFRS 9);
f) changes in the value of the forward elements of forward
contracts when separating the forward element and spot
element of a forward contract and designating as the hedging
instrument only the changes in the spot element, and changes
in the value of the foreign currency basis spread of a financial
instrument when excluding it from the designation of that
financial instrument as the hedging instrument ( IFRS 9);
 Example: Statement of Profit or Loss and OCI
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 Statement of Financial Position (Cont’d…)
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 Sub classifications of line items are required to be disclosed in
either the SFP or the notes.
 The minimum line items that should be included in the SFP are:
a) property, plant and equipment;
b) investment property;
c) intangible assets;
d) financial assets (excluding amounts shown under (e), (h) and
(i));
e) investments accounted for using the equity method;
f) biological assets;
g) inventories;
h) trade and other receivables;
i) cash and cash equivalents;
 Statement of Financial Position (Cont’d…)
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j) the total of assets classified as held for sale and

assets included in disposal groups classified as
held for sale in accordance with IFRS 5 Non-
current Assets Held for Sale and Discontinued
Operations;
k) trade and other payables;
l) provisions;
m) financial liabilities (excluding amounts shown
under (k) and (l));
n) liabilities and assets for current tax, as defined in
IAS 12 Income Taxes;
 Statement of Financial Position (Cont’d…)
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j) deferred tax liabilities and deferred tax assets, as

defined in IAS 12;
k) liabilities included in disposal groups classified as
held for sale in accordance with IFRS 5;
l) non-controlling interests, presented within equity;
and
m)issued capital and reserves attributable to owners of
the parent.
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Classificati Purpose to which put, ie held

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Nature
on for…
Property, …use in production or supply of tangible
plant and goods or services;
equipment administration + for IFRS only
bearer plants (from 2016)
Intangible …use in production or supply of
identifiable;
asset goods or services; non-
administration monetary;
intangible
Non-current For IFRS only carrying amount non-current
asset held will be recovered principally assets
for sale through sale transaction
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Purpose to which put, ie

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held for…
Inventory …sale in the ordinary excludes
course of business financial
(including work-in-process instruments etc
and raw materials)
Investment …capital appreciation; land/buildings/
property rental to others some leasehold
interests
Biological asset …conversion into agricultural biological
in agricultural produce or additional biological
assets (for sale) for IFRS only
activity excluding bearer plants (from
2016)
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27 Classification Nature
Financial asset • cash
• a contractual right to receive
cash or another financial asset
• a contractual right to exchange
financial assets or liabilities with
another entity on potentially
favourable terms
• an equity instrument.
Classificatio Nature of the liability Standards
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Financial • a contractual obligation to deliver cash or • IFRS 9

liability another financial asset; • Sections 11
• a contractual obligation to exchange financial and 12 of the
assets or financial liabilities under conditions IFRS for
that are potentially unfavorable; or SMEs
• a contract that will or may be settled in the
entity’s own equity instruments and is not
settled ‘fixed-for-fixed’.
Foreign A present obligation denominated in a foreign IAS 21 and
currency currency. Section 30 of
denominated the IFRS for
liability SMEs
 Classificat Nature of the liability⎯a present Standards
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ion obligation…
Lease …arising from a lease agreement (a IFRS 16
liability contract). (before 2019
IAS 17) and
Section 20 of
the IFRS for
SMEs
Performance …that is an enforceable promise by IFRS 15
obligation in an entity within a contract with a (before 2018
a contract customer to transfer an economic IAS 18) and
with a resource (a good or a service) to that Section 23 of
customer customer the IFRS for
SMEs
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Classificati Nature of the liability ⎯ a present Standards
on obligation…
Employee …incurred by an entity in exchange for IAS 19 and
benefit services rendered by employees or for Section 28 of
liability the termination of employment (except the IFRS for
share-based payments). SMEs
Cash-settled …arising from a share-based payment IFRS 2 and
share-based transactions in which the entity Section 26 of
payment acquires goods or services by incurring the IFRS for
liability a liability to transfer cash or other SMEs
assets to the supplier of the goods or
services for amounts that are based on
the price (or value) of equity
instruments (including shares or share
options) of the entity.
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Classificati Nature of the liability⎯a present Standards

on obligation…
Income tax A present statutory obligation to pay IAS 12 and
liability taxes that are based on taxable profits. Section 29 of
the IFRS for
SMEs
Insurance An insurer’s net contractual IFRS 4
liability obligations under an insurance
contract.
 Classificat Nature of the liability⎯a present
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Standards
ion obligation…
Provision …of uncertain timing or amount.
(Provisions also include onerous contracts⎯a
contract in which the unavoidable costs of
meeting the obligations under the contract Section 21
exceed the economic benefits expected to be of the IFRS
received under it.)
for SMEs
Contingent …of uncertain timing or amount that is and
liability not recognised because it fails the IAS 37
recognition criteria.
(Contingent liabilities also include
possible obligations.)
 Example: Statement of Financial Position
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 Example: Statement of Financial Position(Cont’d…)
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 The notes shall:
 (a) present information about the basis of
preparation of the financial statements and the
specific accounting policies used
 (b) disclose the information required by IFRSs that
is not presented elsewhere in the financial
statements; and
 (c) provide information that is not presented
elsewhere in the financial statements, but is
relevant to an understanding of any of them.
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37  An entity shall disclose, in the summary of

 significant accounting policies or other notes,
 the judgments,
 estimations,
 assumptions that have the most significant effect on
the amounts recognized in the financial statements.
 An entity shall disclose information that
enables users of its financial statements to
evaluate the entity’s objectives, policies and
processes for managing capital.