IAS 1 Provides Guidelines On The Presentation of The

IAS 1 provides guidelines on the presentation of the “general purpose financial statements,”
It provides overall requirements for the presentation of financial statements, guidance on their
structure, and the minimum requirements for their content.
It also prescribes the components of the financial statements that together would be considered a
complete set of financial statements.
2. SCOPE
The requirements of IAS 1 are to be applied to all “general purpose financial statements” that
have been prepared and presented in accordance with IFRS.
“General purpose financial statements” are those intended to meet the needs of users who are not
in a position to demand reports that are tailored according to their information needs.
IAS 1 is not applicable to condensed interim financial statements prepared according to IAS 34.
Additional requirements for banks and similar financial institutions are contained in IAS 30,
Disclosures in the Financial Statements of Banks and Similar Financial Institutions. Modification
of the presentation requirements of the Standard may be required by nonprofit entities and those
entities whose share capital is not equity.
3 PURPOSE AND COMPONENTS OF FINANCIAL STATEMENTS

Financial statements provide stakeholders with information about the entity’s financial position,
financial performance, and cash flows by providing information about its assets, liabilities,
equity, income and expenses, other changes in equity, and cash flows.
4 OVERALL CONSIDERATIONS
Fair Presentation and Compliance with IFRS “Fair presentation” implies that the financial
statements “present fairly” (true and fair) view of the financial position, financial performance,
and cash flows of an entity.
Fair presentation requires faithful representation of the effects of transactions in accordance with
the definitions and recognition criteria for assets, liabilities, income, and expenses laid down in
the IASB’s Framework.
Entities are required to make an explicit statement of compliance with IFRS in their notes if their
financial statements comply with IFRS.
In extremely rare circumstances, “True and fair override” is allowed if management believes. In
such circumstances, it is incumbent upon the entity that departs from a requirement of IFRS to
disclose.
Going Concern
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. When upon assessment
it becomes evident that there are material uncertainties regarding the ability of the business to
continue as a going concern, those uncertainties should be disclosed.
Accrual Basis of Accounting
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
Entities are required to retain their presentation and classification of items in successive periods
unless an alternative would be more appropriate or if so required by a Standard.
Materiality and Aggregation
Each material class of similar items shall be presented separately in the financial statements.
Material items that are dissimilar in nature or function should be separately disclosed.
Offsetting
Assets and liabilities, income and expenses cannot be offset against each other unless required or
permitted by a Standard or an Interpretation.
Comparative Information
Comparative information (including narrative disclosures) relating to the previous period should
be reported alongside current period disclosure, unless otherwise required.
STRUCTURE AND CONTENT
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.
Reporting Period
Financial statements should be presented at least annually. In all other cases, that is, when a
period shorter or longer than one year is used, the reason for using a different period and lack of
total comparability with previous period information must be disclosed.
 Balance Sheet
Current and noncurrent assets and liabilities should be classified separately on the face of the
balance sheet
 Current assets. A current asset is one that is likely to be realized within the normal
operating cycle.
 Current liabilities. A current liability is one that is likely to be settled within the
normal operating cycle.
 The minimum line items that should be included in the balance sheet 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
(j) Trade and other payables
(k) Provisions
(l) Financial liabilities [excluding amounts shown under (j) and (k)]
(m) Liabilities and assets for current tax
(n) Deferred tax liabilities and deferred tax assets
(o) Minority interest, presented within equity
(p) Issued capital and reserves attributable to equity holders of the parent
Income Statement
All items that qualify as income or expense should be included in the profit or loss calculation
for the period, unless stated otherwise.
 The minimum line items to be included in the income statement are
• Revenue
• Finance costs
• Share of the profit or loss of associates and joint ventures accounted for using the equity
method
• The total of the post-tax profit or loss of discontinued operations, post-tax gain or loss
recognized on the disposal of the assets or disposal group(s) constituting the discontinued
operation
• Tax expense
• Profit or loss
 The amount of total and per-share dividends distributable to equity holders should be
disclosed in the income statement, the statement of changes in equity, or the notes.
Statement of Changes in Equity

 The entity is required to present a statement of changes in equity consisting of
• Profit or loss for the period
• Each item of income and expense for the period that is recognized directly in equity, and the
total of those items
• Total income and expense for the period, showing separately the total amounts attributable to
equity holders of the parent and to minority interest
• For each component of equity, the effects of changes in accounting policies and corrections of
errors
 Capital transactions with owners
 The balance of accumulated profits at the beginning and at the end of the period,
and the movements for the period
 A reconciliation between the carrying amount of each class of equity capital and
each reserve at the beginning and end of the period, disclosing each movement
 These amounts also may be presented either in the preceding statement or in the notes.
Cash Flow Statement

The cash flow statement serves as a basis for evaluating the entity’s ability to generate cash and
cash equivalents and the needs to utilize these cash flows (IAS 7, Cash Flow Statements).
Notes to the financial statements.
The notes should disclose the basis of preparation of financial statements, significant accounting
policies, information required by IFRS but not disclosed in the statements, and additional
information not present in the statements but required for further comprehension. Notes should
be systematically presented, and each item in the statements should be cross-referenced to the
relevant note.

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IAS 1 provides guidelines on the presentation of the “general purpose financial statements,”

3 PURPOSE AND COMPONENTS OF FINANCIAL STATEMENTS

STRUCTURE AND CONTENT

Identification of the Financial Statements

(a) Property, plant, and equipment

Statement of Changes in Equity

Cash Flow Statement

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