Objective
To set out the
overall framework for presenting general purpose financial statements,
including guidelines for their structure and the minimum content.
Summery
• Fundamental
principles established for the preparation of financial statements, including going
concern assumption, consistency in presentation and classification, accrual
basis of accounting, and materiality.
• Assets and
liabilities, and income and expenses, are not offset unless offsetting is permitted
or required by another IFRS.
• Comparative
prior-period information is presented for amounts shown in the financial statements
and notes.
• Financial
statements are generally prepared annually. If the end of the reporting period changes,
and financial statements are presented for a period other than one year, additional
disclosures are required.
• A complete set of
financial statements comprises:
– a statement of
financial position;
– a statement of
profit or loss and other comprehensive income;
– a statement of
changes in equity;
– a statement of
cash flows;
– notes; and
– a statement of
financial position as at the beginning of the earliest comparative period.
• Entities may use
titles for the individual financial statements other than those used above.
• Specifies minimum
line items to be presented in the statement of financial position, statement of
profit or loss and other comprehensive income and statement of changes in
equity, and includes guidance for identifying additional line items. IAS 7
provides guidance on line items to be presented in the statement of cash flows.
• In the statement
of financial position, current/non-current distinction is used for assets and
liabilities unless presentation in order of liquidity provides reliable and
more relevant information.
• The statement of
profit or loss and other comprehensive income includes all items of income and
expense – (i.e. all ‘non-owner’ changes in equity) including (a) components of
profit or loss and (b) other comprehensive income (i.e. items of income and
expense that are not recognised in profit or loss as required or permitted by
other IFRSs). These items may be presented either:
– in a single
statement of profit or loss and other comprehensive income (in which there is a
sub-total for profit or loss); or
– in a separate
statement of profit or loss (displaying components of profit or loss) and a
statement of profit or loss and other comprehensive income (beginning with profit
or loss and displaying components of other comprehensive income).
• Items of other
comprehensive income should be grouped based on whether or not they are potentially
reclassifiable to profit or loss at a later date.
• Analysis of
expenses recognised in profit or loss may be provided by nature or by function.
If presented by function, specific disclosures by nature are required in the
notes.
• The statement of
changes in equity includes the following information:
– total
comprehensive income for the period;
– the effects on
each component of equity of retrospective application or retrospective restatement
in accordance with IAS 8; and
– for each
component of equity, a reconciliation between the opening and closing balances,
separately disclosing each change.
• Specifies minimum
note disclosures which include information about
– accounting
policies followed;
– the judgements
that management has made in the process of applying the entity’s accounting
policies that have the most significant effect on the amounts recognized in the
financial statements;
–sources of
estimation uncertainty; and
–information about
management of capital and compliance with capital requirements.
• Implementation
guidance for IAS 1 includes illustrative financial statements other than the statement
of cash flows (see IAS 7).