Ias 1


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Ias 1

  1. 1. Corporate Financial Reporting
  2. 2. IAS 1– Presentation of Financial Statements • Objective of IAS 1 The objective of IAS 1 is to prescribe the basis for presentation of general purpose financial statements, to ensure comparability both with the entity's financial statements of previous periods and with the financial statements of other entities.
  3. 3. Contents: • It sets out the overall framework and responsibilities for the presentation of financial statements, • guidelines for their structure and minimum requirements for the content of the financial statements, • Standards for recognising, measuring, and disclosing specific transactions are addressed in other Standards and Interpretations.
  4. 4. Objective of Financial Statements is to provide information about: •   The financial position, •   Financial performance, and •    Cash flows of an entity To meet that objective, financial statements provide information about an entity's:  • Assets, Liabilities and Equity. • Income and expenses, including gains and losses. • Cash flows.
  5. 5. Components of Financial Statements A complete set of financial statements should include: 1.a statement of financial position at the end of the period, 2.a statement of comprehensive income for the period, 3.a statement of changes in equity for the period, 4.statement of cash flows for the period, 5.notes, comprising a summary of accounting policies and other explanatory notes.
  6. 6. Structure and Content of Financial Statements in General 1.Clear Identification In an annual report: •  the financial statements •  the reporting enterprise •  whether the statements are for the enterprise or for a group •  the date or period covered •  the presentation currency • the level of precision (thousands, millions, etc.)
  7. 7. 2. Reporting Period • There is a presumption that financial statements will be prepared at least annually. • If the annual reporting period changes and financial statements are prepared for a different period, the entity must disclose the reason for the change and a warning about problems of comparability.
  8. 8. The Statement of Financial Position An entity must normally present a classified SFP, separating current and noncurrent assets and liabilities.
  9. 9. Current Assets Vs Non Current Assets Current Assets • Are cash; cash equivalent; assets held for collection, sale, or consumption within the enterprise's normal operating cycle; • or assets held for trading within the next 12 months. • All other assets are noncurrent.
  10. 10. Current Libilities Vs Non Current Libilities Current Libilities • Are those to be settled within the enterprise's normal operating cycle or due within 12 months, • or those held for trading, or those for which the entity does not have an unconditional right to defer payment beyond 12 months. Other liabilities are noncurrent.
  11. 11. Minimum items to be presented on the face of SFP 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;
  12. 12. Minimum items to be presented on the face of SFP j.        Trade and other payables; k.      Provisions; l.         Financial liabilities (excluding amounts shown under (j) and (k)); m.     Liabilities and assets for current tax, as defined in IAS 12; n.       Deferred tax liabilities and deferred tax assets, as defined in IAS 12; o.      Minority interest, presented within equity; and p.      Issued capital and reserves attributable to equity holders of the parent
  13. 13. Format of the balance sheet • Different forms of presentation of Balance Sheet • Assets can be presented current then noncurrent, or vice versa, and liabilities and equity can be presented current then noncurrent then equity, or vice versa. A net asset presentation (assets minus liabilities) is allowed.
  14. 14. Format of the balance sheet • Regarding issued share capital and reserves, the following disclosures are required: • numbers of shares authorised, issued and fully paid, and issued but not fully paid • par value • reconciliation of shares outstanding • description of rights, preferences • treasury shares, including shares held by subsidiaries and associates • shares reserved for issuance under options & contracts • a description of the nature & purpose of each reserve
  15. 15. Information to be disclosed on the face of profit and loss account • Revenues • Financial costs • Profit/loss of associates and joint ventures • Tax expense • Profit and loss from ordinary activities • Extraordinary items • Net profit or loss for the period
  16. 16. Information to be disclosed in the Equity statement The enterprise should present a separate component showing the following: 1. Net profit or loss for the period 2. Any gain or loss that is required to be recognized directly in equity 3. Capital transactions with owners 4. Balances of accumulated profit or losses 5. A reconciliation of equity capital, share premium and reserves
  17. 17. Notes to the Financial Statements The notes must: • Present information about the basis of preparation of the financial statements and the specific accounting policies used; • Disclose any information required by IFRSs that is not presented on the face of the balance sheet, income statement, statement of changes in equity, or cash flow statement; and
  18. 18. Notes to the Financial Statements • Provide additional information that is not presented on the face of the balance sheet, income statement, statement of changes in equity, or cash flow statement that is deemed relevant to an understanding of any of them.
  19. 19. Notes to the Financial Statements IAS 1 suggests that the notes should normally be presented in the following order: • a statement of compliance with IFRSs; • a summary of significant accounting policies applied, including: • the measurement basis (or bases) used in preparing the financial statements; and • the other accounting policies used.
  20. 20. Responsibility of Financial Statements The board of directors or the governing body of the enterprise are responsible for the preparation of the financial statements. The financial statements should be presented at least once in a year. The financial statements should be made available to the public within 6-months of balance sheet date.
  21. 21. Comparative Figures 2002 Current Assets Non Current Assets Current Liabilities Long term liabilities Equity Revenues Expenses 2001 Current Assets Non Current Assets Current Liabilities Long term liabilities Equity Revenues Expenses
  22. 22. Assignment • Check the application of IAS 1 in an annual report.