Kế toán quốc tế 1 28/09/2021

LEARNING OBJECTIVES 2
International Financial Reporting Standards

After studying this topic, students should be able to:

- Describe a complete set of financial statements

- Identify general features of financial statements
- Understand following components of financial statements:
IAS 1
• Statement of financial position (balance sheet)
Presentation of Financial Statements • Statement of comprehensive income
• Statement of change in equity
• Note to the financial statements

1 2

Objective of financial reporting 3 Objective of financial reporting 4

• Provide financial information about the reporting entity that To meet that objective, financial statements provide
is useful to existing and potential investors, lenders and information about an entity's:
other creditors in making decisions about providing ▪ assets
resources to the entity. ▪ liabilities
– The information provided about financial performance ▪ equity
▪ income and expenses, including gains and losses
helps existing and potential investors, lenders and
▪ contributions by and distributions to owners (in their
other creditors to understand the return the entity has capacity as owners)
produced on its economic resources. ▪ cash flows.
That information, along with other information in the notes,
assists users of financial statements in predicting the
entity's future cash flows and, in particular, their timing and
certainty.

3 4

IAS 1 - Presentation of Financial statements 1

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Components of financial statements 5 General features of financial statements 6

• Fair presentation
A complete set of financial statements includes:
– a statement of financial position (balance sheet) at the end
of the period
– a statement of comprehensive income (profit or loss and
other comprehensive income) for the period
– a statement of changes in equity for the period
– a statement of cash flows for the period
– notes, comprising a summary of significant accounting
policies and other explanatory notes
– comparative information prescribed by the standard.
– achieved through application of IFRS
– disclose compliance with IFRS
– full compliance with IFRS required
– application before effective date
– disclose that fact
– true and fair override
– only in extremely rare circumstances
– In extremely rare circumstances, where compliance with
a Standard would be misleading so it would conflict with
objective set out in the framework
– departure is permissible, if regulatory framework requires
or does not prohibit
– Specified disclosure required

5 6

General features of financial statements 7 General features of financial statements 8

• Going concern • Materiality & Aggregation

– No intention to liquidate or to cease trading – material → present separately
→ accrual basis of accounting – immaterial → aggregate with other items
– Disclose in case of material uncertainty • Offsetting
– If not going concern, use new basis of accounting – Assets/Liabilities, and Income and expenses shall
• Accrual basis - transactions and events not be offset unless required or permitted
– are recognised when they occur, and • Comparative information
– in the periods to which they relate – include narrative and descriptive information
• Consistency – At least two statements and a third if retrospective
application or restatement
– presentation & classification be retained unless
– change in nature of operations necessitates another • Frequency of reporting
presentation or – At least annually
– a standard or an interpretation requires a change – To explain if longer or shorter

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IAS 1 - Presentation of Financial statements 2

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Structure and content of

financial statements 9 Statement of financial position 10

• Identify what is included Usefulness

• Must display the following ◆ Computing rates of return.
1. the name of the entity ◆ Evaluating the capital structure.
2. whether the financial statements are consolidated
or not ◆ Assess risk and future cash flows.
3. the date of the balance sheet or period covered ◆ Assess the company’s:
4. the reporting currency and
► Liquidity,
5. the level of rounding (e.g. $000s)
► Solvency, and

► Financial flexibility.

LO 1

9 10

Statement of financial position 11 Statement of financial position 12

Elements of the Statement of Financial Position Elements of the Statement of Financial Position

ASSET LIABILITY EQUITY ASSET LIABILITY EQUITY

◆ Resource controlled by the entity. ◆ Present obligation of the entity.

◆ Result of past events. ◆ Arising from past events.
◆ Future economic benefits are expected to flow to the entity. ◆ Settlement is expected to result in an outflow of resources
embodying economic benefits.

11 12

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Statement of financial position 13 Statement of financial position 14

Elements of the Statement of Financial Position Subclassifications

ASSET LIABILITY EQUITY

◆ Residual interest in the assets of the entity after deducting

all its liabilities.

13 14

Statement of financial position 15 Statement of financial position 16

• current vs. non-current distinction • Current vs. Non-current Assets

• or, classify based on liquidity if more relevant
• obligatory line items on face of B/S
• disclosure required on face or in notes
– relevant sub-classifications of items above
– information on share capital and reserves
– Realised/settled in the normal course of
operating cycle or within 12 month of the
balance sheet date
– Held primarily for the purpose of being traded
– Unrestricted cash or a cash equivalent
– All other assets are non-Current

15 16

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Statement of financial position 17 Statement of financial position 18

• Current vs. Non-Current Liabilities As a minimum, the statement of financial position shall
include line items that present the following amounts:
– Settled in the normal course of operating
• (a) property, plant and equipment;
cycle or due to be settled within 12 month of
• (b) investment property;
the balance sheet date
• (c) intangible assets;
– Held primarily for the purpose of being traded
• (d) financial assets (excluding amounts shown under (e), (h) and (i));
– No unconditional right to defer settlement for • (e) investments accounted for using the equity method;
at least 12 months
• (f) biological assets;
– Post-balance sheet events (refinancing, • (g) inventories;
correction of defaults) do not affect current vs. • (h) trade and other receivables;
non-current classification • (i) cash and cash equivalents;
– All other Liabilities are non-Current

17 18

Statement of financial position

Statement of financial position 19 Non-current assets 20

• (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
• (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
• (o) deferred tax liabilities, deferred tax assets, as defined in IAS 12
• (p) liabilities included in disposal groups classified as held for sale in
accordance with IFRS 5
• (q) non-controlling interests, presented within equity; and
• (r) issued capital and reserves attributable to owners of the parent.

19 20

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Statement of financial position Statement of financial position

Current assets 21 Non-current and current liabilities 22

21 22

Statement of financial position

Equity 23 Statement of comprehensive income 24

• Usefulness
• Concepts
• Choice in presentation and basic requirements
• Profit or loss
• Other comprehensive income
• Other requirements

23 24

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Statement of comprehensive income Statement of comprehensive income

Usefulness 25 Concepts 26

Comprehensive Other
Profit
income = + comprehensive
or loss
for the period income
Evaluate past performance.

The change in equity The total of Items of income and

during a period resulting income less expense (including
Predicting future performance. from transactions and expenses, reclassification
other events, other than excluding the adjustments) that
those changes resulting components of are not recognised in
from transactions with other profit or loss as
Help assess the risk or uncertainty owners in their capacity comprehensive required or permitted
as owners income. by other IFRSs
of achieving future cash flows.

25 26

Other comprehensive income - Statement of comprehensive income

Examples 27 Choice in presentation and basic requirements 28

• Changes in revaluation surplus where the revaluation method is used

under IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets
• An entity has a choice of presenting:
• Exchange differences from translating functional currencies into presentation
currency in accordance with IAS 21 The Effects of Changes in Foreign – A single statement with profit or loss and other
Exchange Rates comprehensive income presented in two sections, or
• Gains and losses on remeasuring available-for-sale financial assets in
– Two statements:
accordance with IAS 39 Financial Instruments: Recognition and
Measurement ▪ a separate statement of profit or loss
• The effective portion of gains and losses on hedging instruments in a cash ▪ a statement of comprehensive income, immediately
flow hedge under IAS 39 or IFRS 9 Financial Instruments
following the statement of profit or loss and
• Gains and losses on remeasuring an investment in equity instruments where
the entity has elected to present them in other comprehensive income in beginning with profit or loss
accordance with IFRS 9
• The effects of changes in the credit risk of a financial liability designated as
at fair value through profit and loss under IFRS 9.
• Remeasurements of a net defined benefit liability or asset recognised in
accordance with IAS 19 Employee Benefits (2011)

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Statement of comprehensive income Statement of comprehensive income

Choice in presentation and basic requirements 29 Choice in presentation and basic requirements 30

One Two
Statement Statement
Approach Approach

29 30

Statement of comprehensive income Statement of comprehensive income

Choice in presentation and basic requirements 31 Profit or loss 32

• The statement(s) must present:
– profit or loss
– other comprehensive income
– total comprehensive income for the period
– an allocation of profit or loss and comprehensive
income for the period between non-controlling
interests and owners of the parent.
• The following minimum line items must be presented:
– revenue
– gains and losses from the derecognition of financial
assets measured at amortised cost
– finance costs
– share of the profit or loss of associates and joint
ventures accounted for using the equity method
– certain gains or losses associated with the
reclassification of financial assets
– tax expense
– a single amount for the total of discontinued items

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Statement of comprehensive income Statement of comprehensive income

Profit or loss 33 Profit or loss 34

• Expenses recognised in profit or loss should be

analysed either:
– By nature (raw materials, staffing costs, depreciation, etc.)
or
– By function (cost of sales, selling, administrative, etc).
Additional information on the nature of expenses must be
provided.

33 34

Statement of comprehensive income Statement of comprehensive income

Other comprehensive income 35 Other requirements 36

• The other comprehensive income section is
required to present line items which are classified
by their nature, and grouped between those items
that will or will not be reclassified to profit and loss
in subsequent periods.
• Additional line items may be needed to fairly
present the entity's results of operations
• Items cannot be presented as 'extraordinary items'
in the financial statements or in the notes
• Certain items must be disclosed separately either in
the statement of comprehensive income or in the
notes, if material

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Statement of change in equity 37 Statement of change in equity 38

• Separate component of financial statements

• On the face
– (a) profit or loss for the period
– (b) gains and losses not reflected in income statement
– (a)+(b) attributable to each of Minority Interest and
equity holders of the parent
• On the face or in the notes
– Capital transactions with owners
– Movements in accumulated profit
– Movements in capital and reserves

37 38

Statement of cash flows 39 Notes to the financial statements 40

• Comply with IAS 7 (will be covered in the next topic).
• Basis of preparation of financial statements
• Accounting policies selected
• Additional disclosure to present fairly
• Other sundry disclosures
– e.g. domicile, legal form, country of incorporation

39 40

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Notes to the financial statements 41 Notes to the financial statements 42

ILLUSTRATION
Accounting Policies—
Inventory
Additional Notes to the Financial Statements
IFRS requires specific disclosures. Examples include:
1. Items of property, plant, and equipment are disaggregated
into classes such as

◆ land,

◆ buildings, etc.,

◆ in the notes, with related accumulated depreciation

ILLUSTRATION
Accounting Policies— reported where applicable.
Intangible Asset

41 42

Additional Notes 43 The end 44

ILLUSTRATION
Reconciliation Schedule for
Property, Plant, and Equipment

Thank you!

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IAS 1 - Presentation of Financial statements 11