DipIFRS ACCA course - IAS1 Presentation of Financial Statements No.15

DipIFRS ACCA course - IAS1 Presentation of Financial Statements No.15

Accrual basis of accounting:

IAS 1 requires an entity to prepare its financial statements excluding cash flow information using the accrual basis of accounting.

Consistency of presentation:

The presentation and classification of items in the financial statements must be kept from period to period unless the change is justified either by a change in:

1. The circumstances.
2. The requirement of a new IFRS.

Materiality and aggregation:

Information is material if it is reasonably expected to affect:

1. Omitting it.
2. Misstating.
3. Or obscuring.

On decisions made by primary users of general-purpose financial statements on the basis of those financial statements that provide financial information about a specific reporting entity.
Each significant class of similar items must be presented separately in the financial statements.
Dissimilar items can only be grouped if they are immaterial individually ..... such as petty cash.

However, information should not be withheld by aggregating or providing non-material information. Materiality considerations apply to all parts of the financial statements. Even when the standard requires specific disclosure, materiality considerations apply.


It is not permissible to set off between:

1. Assets and liabilities
2. Income and expenses
Unless that:
1. Required.
2. Or permitted.
In accordance with International Financial Reporting Standards.

Comparative information:

IAS 1 requires disclosure of comparative information in relation to the previous period of all amounts included in the financial statements, whether in:
The face of the financial statements ​Or in the notes of the financial statements.
Unless otherwise required by another standard.

Comparison information is provided for:
1. Narrative.
2. Descriptive.
Where it is relevant to understanding the financial statements of the current period.

The entity is required to submit at least two of each of the following primary financial statements:
1. Statement of financial position.
2. A statement of profit or loss and other comprehensive income.
3. Separate statements of profit or loss (where presented).
4. Statement of cash flows.
5. A statement of changes in equity.
6. Related notes for each of the above items.

Note that

A third Statement of the financial position must be submitted if the facility applies any of the following:
1. Retrospectively applies an accounting policy.
2. Or restates items.
3. Or reclassify items.

These amendments had a material impact on the information included in the statement of financial position at the beginning of the comparison period

Structure and content of Financial Statements in General:
IAS 1 requires an entity to clearly identify the following:
1. The financial statements, which must be distinguished from other information in a published document.
2. Each financial statement and notes on financial statements.

In addition, the following information should be prominently displayed and repeated as necessary:
1. The name of the reporting entity and any change in the name.
2. Whether the financial statements:
1. A group of entities.
2. An individual entity.
3. Information about the reporting period.
4. presentation currency
This is as defined in IAS 21 - Effects of Changes in Foreign Exchange Rates
5. Level of approximation used (For example thousands, millions).

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