Presentation of Financial Statements

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Presentation of Financial Statements
IAS 1

• Prepared By
• Rajat Dua

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Objectives

• Basis of presentation of Financial Statements
• Comparability
• To setout the framework for preparation of
  financial statements
• True fair information

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Scope
Applies to all general purpose financial
statements based on International Financial
Reporting Standards.
General purpose financial statements are those
intended to serve users who do not have the
authority to demand financial reports tailored
for their own needs.
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Financial statements should include
Balance Sheet (Statement of financial Position)
Notes, comprising a summary of accounting
policies and other explanatory notes
Cash flow Statement (Statement of Cash flows)
Income Statement (Statement of comprehensive
income)
Statement on changes in equity
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Requirements
Going Concern
An entity preparing IFRS financial statements is
presumed to be a going concern. If not, the
uncertainties must be disclosed.
Consistency
If the annual reporting period changes and
financial statements are prepared for a different
period, the enterprise must disclose the reason
for the change and a warning about problems of
comparability.
Reporting period
IAS 1 requires that an entity prepare its
financial statements, except for cash flow
information, using the accrual basis of
accounting.
Accrual basis of accounting
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Requirements
Each material class of similar items must be
presented separately in the financial statements.
Dissimilar items may be aggregated only if the
are individually immaterial.
Materiality and aggregation
Comparative Information
With entity's financial statements of previous
periods and with the financial statements of
other entities
Statement of changes in Equity
All owner changes in equity to be reflected in
Statement of changes in Equity
Offsetting
Assets and liabilities, and income and expenses,
may not be offset unless required or permitted by
a Standard or an Interpretation.
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Structure and contents of financial statements in
general

• Clearly identify
• 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.)

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Balance Sheet
IAS 1 does not prescribe the format of the
balance sheet.
Liabilities and equity can be presented current
then noncurrent then equity, or vice versa.
Assets can be presented current then noncurrent,
or vice versa.
A net asset presentation (assets minus
liabilities) is allowed
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Balance Sheet
Classifying current and non-current assets and
liabilities.
Disclosure is required that separates the
longer-term amounts from the 12-month
amounts. Long-term debt expected to be
refinanced under an existing loan facility is
noncurrent, even if due within 12 months.
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Income Statement
All items of income and expense recognized in a
period must be included in profit or loss unless
a Standard or an Interpretation requires
otherwise.
On the face of the income statement, following
items must be disclosed
Profit or loss attributable to minority interest.
Profit or loss attributable to equity holders of
the parent.
Additional line items that may be needed to
fairly present the enterprise's results of
operations like finance cost, tax expense etc.
No items may be presented on the face of the
income statement or in the notes as
"extraordinary items
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Statement of Comprehensive Income
On 6 September 2007, the IASB issued a revised
IAS 1 that require an entity must
Present all non-owner changes in equity either
in one statement of comprehensive income or, in
two statements (a separate income statement and
a statement of comprehensive income can be
prepared for income and expenses). Components
of Comprehensive income are NOT permitted to be
presented in the Statement of changes in equity.
Other Comprehensive Income like
reclassification adjustments, changes in
revaluation surplus etc.
Income tax relating to each component of other
comprehensive income to be disclosed. Reclassific
ation adjustments relating to components of other
comprehensive income also to be disclosed.
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Cash Flow Statement
Rather than setting out separate standards for
presenting the cash flow statement, IAS 1 refers
to IAS 7, Cash Flow Statements
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Notes to the Financial Statements
Notes must disclose/present
Basis of preparation of the financial statements
and the specific accounting policies used.
Any information required by IFRSs that is not
presented on the face of financials.
Should be cross-referenced from the face of the
financial statements
Information about the key assumptions concerning
the future.
Information about other key sources of estimation
uncertainty at the balance sheet date, that have
a significant risk of causing a material
adjustment to the carrying amounts of assets and
liabilities.
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Notes to the Financial Statements
Notes must be presented in the following order
A statement of compliance with IFRSs.
A summary of significant accounting policies or
other notes, judgments applied, including
Contingent liabilities and un-recognized
contractual commitments.
Non-financial disclosures, such as the entity's
financial risk management objectives and policies.
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Notes to the Financial Statements
Dividend Disclosures
Capital Disclosures
Amount recognized for distribution to equity
holders
Objectives, policies and processes for managing
capital
Amount per share
Quantitative data
Amount of proposed dividends
Capital requirement if any whether complied
Any cumulative preference dividends not recognized
If not complied, consequences of such
non-compliance
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Notes to the Financial Statements
The following other note disclosures are required
Description of operations and principal activities
Domicile of the enterprise
Country of incorporation
Name of its parent and the ultimate parent.
Address of registered office or principal place
of business.
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Questions??
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Thank You