DipIFRS ACCA course - IAS1 Presentation of Financial Statements No.11

DipIFRS ACCA course - IAS1 Presentation of Financial Statements No.11


1. Determine the basis for presenting the general purpose financial statements

2. To ensure the possibility of comparison with the entity’s financial statements for previous periods and the financial statements of other entities.

International Accounting Standard 1 (IAS 1) specifies overall requirements for the presentation of financial statements

3. Provide guidance on the structure of financial statements and the minimum content of those statements.

Where standards for recognition, measurement and disclosure of specific transactions are covered in other standards and interpretations.

The SCOPE of IAS 1:

IAS 1 applies to all general purpose financial statements prepared and presented in accordance with International Financial Reporting Standards (IFRS).

General purpose financial statements are those intended to serve users who ..
(not in a position to require financial reports tailored to their particular information needs).

The OBJECTIVE of the financial statements: General Features
The purpose of general-purpose financial statements is to provide information about:

1. Financial position
2. Financial performance

How well the company is using assets from its primary business model and generating revenue. The term is also used as a general measure of a company's overall financial health over a given period.
Analysts and investors use financial performance to compare similar companies in the same industry or to compare industries or sectors overall.

3. Cash flows of an entity

Which is useful for a wide range of users in making economic decisions.

To achieve this objective, the financial statements provide information about:
1. Assets.
2. Liabilities.
3. Equity.
4. Income and expenses, including gains and losses.
5. Contributions by and distributions to owners (in their capacity as owners)
6. Cash flows.

This information ... along with other information contained in the notes ... helps users of financial statements in forecasting the entity's future cash flows ... and in particular their timing and certainty.

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