IAS 1 – Presentation of Financial Statements

➢ Sets out the overall requirements for Financial Statements, guidelines for their structure,
and minimum requirements for their content.
➢ To ensure comparability both with the entity’s financial statements of previous periods
AND with the financial statements of other entities.
➢ Includes;
o How the FS should be structured.
o The minimum requirement for their content and overriding concepts such as
going concern.
o The accrual basis of accounting
o The current/non-current distinction.
➢ Applies to annual periods.
➢ Applies to all general purpose financial statements that are prepared and presented in
accordance with IFRS.
➢ Reports presented outside Financial Statements are outside the scope of IFRS.

General Purpose Financial Statements – intended to serve users who are not in a
position to require financial reports tailored to their particular information needs.

Financial Statements
➢ Provide information about the financial position, financial performance, and cash flow
of an entity that is useful to a wide range of users in making economic decisions (e.i.
predicting the entity’s future cashflows and their timing and uncertainty.)
➢ Provide information about the entity’s;
o Assets
o Liabilities
o Equity
o Income and expenses, including gains and losses
o Contribution by and Distributions to owners (in their capacity as owners)
o Cash Flows
o Also: other information in the Notes
➢ All FS are required to be presented with equal prominence.

Components of Financial Statements (an entity may use other titles for the
statements)

For FINANCIAL POSITION:

➢ Statement of Financial Position at the end of the period.
o Balance Sheet
o Statement of Financial Position (Balance Sheet) at the beginning of the
earliest comparative period when;
▪ The entity Applies an accounting policy retrospectively, or
▪ Makes a retrospective restatement of items in its financial
statements, or
▪ It reclassifies items in its financial statements
 For FINANCIAL PERFORMANCE:
➢ Statement of Profit or Loss and other comprehensive income for the period.
o Presented as a single statement or;
o Presented as Statement of Profit or Loss, immediately followed by a statement
presenting Comprehensive Income beginning with profit or loss.
➢ Statement of Changes in Equity

For CASH FLOWS

➢ Statement of Cash Flows for the period.

ADDITIONAL
➢ Notes – comprising a summary of significant accounting policies and other
explanatory noes.
➢ Comparative information prescribed by the standard.

FAIR PRESENTATION and COMPLIANCE with IFRS

Fair Presentation
- FS must present fairly the financial position, financial performance, and cash flows of an
entity. Inlcudes;
o Effects of transactions
o Other events
o Conditions in accordance with the definition and recognition of Assets, Liabilities,
Income, and Expenses set out in the Framework.

Compliance
- Financial statements cannot be described as complying with IFRSs unless they comply
with all the requirements of IFRSs which are;
o International Financial Reporting Standards
o International Accounting Standards
o IFRIC Interpretations and SIC Interpretations
- In some rare circumstance, compliance of the IFRS requirement would result to the FS
being misleading, the entity is required to depart from the IFRS requirement with detailed
disclosure of the nature, reasons, and impact of the departure.

GOING CONCERN
- Financial statements are normally prepared assuming the entity is a going concern and
will continue in operation for the foreseeable future.
- IAS 1 requires management to make an assessment of an entity's ability to continue as a
going concern.
o If management has significant concerns about the entity's ability to continue as a
going concern, the uncertainties must be disclosed.
o If management concludes that the entity is not a going concern, the financial
statements should not be prepared on a going concern basis, in which case IAS 1
requires a series of disclosures.