NZ IAS 1Objective – prescribe the basis for presentation

of general purpose financial statements (para 1)Scope – applies to all general purpose financial

statements prepared and presented in accordance with NZ IFRSs (para 2)

Financial statements are a structured representation of the financial position and financial performance of an entity (para 9)

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Financial statements…Statement of comprehensive incomeStatement of financial positionStatement of changes in equityStatement of cash flows Notes, comprising a summary of significant

accounting policies and other explanatory notes (para 10(e))

Note that the use of these names is not mandatory

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Overall considerationsFair (faithful) presentation (para 15) and compliance

with NZ IFRS – explicit unreserved statement needs to be made (para 16)

Going-concern basis (paras 25 & 26)

Accrual basis of accounting (paras 27 & 28)

Materiality & aggregation (paras 7 and 29-31)

Offsetting (paras 32–35)

Frequency of reporting (paras 36–37)

Comparative information (paras 38-44)

Consistency of presentation (paras 45 & 46)

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Statement of Financial PositionThe Statement of financial position is the basis

for evaluating capital structure, liquidity, solvency and financial flexibility as well as for computing rates of return

Has limitations such as the optional measurement of assets (cost or revaluation models) and omission of internally generated intangible assets

Should always be read in conjunction with the Notes

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ClassificationMinimum requirements for display on the face of the

Statement of Financial Position (line items) are in para 54Further line items can be displayed if relevant to an

understanding of an entity’s financial position (para 55)Items are classified on the basis of being current or non-

current (current implies being sold, consumed or realised within the normal operating cycle or within 12 months of balance date)

Note that items are usually displayed in liquidity order

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Further informationParas 77 & 78 note the sub classifications line

items that need to be displayed – this is usually complied with in the NotesProperty, plant and equipment (see NZ IAS 16 para 73)

ReceivablesInventories (see NZ IAS 2 para 36)

ProvisionsContributed equity & reserves

Note the disclosure for share capital (para 79)

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Statement of Comprehensive IncomeTotal comprehensive income represents the change in equity

resulting from transactions and other events other than changes resulting from transactions with owners in their capacity as owners (para 7) such as share issues or dividend payments

The statement presents the total of income less expense (profit or loss) followed by other comprehensive income

Other comprehensive income includes: Changes in revaluation surplus (PPE/Intangibles); Exchange differences on translating foreign operations; Actuarial gains/losses on defined benefit pension plans; Gains/losses on remeasuring available for sale financial assets; Effective portion of gains/losses on hedging instruments in a cash flow

hedge; Share of other comprehensive income (after tax) of associates and equity

accounted joint ventures

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PresentationMinimum line items required on face of statement

(para 82) are:RevenueFinance costs (separate from other expenses)Share of profits/(losses) of associates and joint ventures

accounted for under the equity methodTax expensesProfit/(loss) (Non-controlling interest/Owners of parent)Each component of other comprehensive incomeShare of comprehensive income of associates and joint

venturesTotal comprehensive income (NCI/Owners of parent)

9

Material itemsWhen items of income or expense are material,

an entity needs to disclose their nature and amount separately (para 97).

These include (para 98):Inventory and PPE write-downs/impairmentCost of restructuringDisposals of PPE and other investmentsProfit/(losses) re discontinuing operationsLitigation settlementsReversals of provisions

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Additional informationExpenses are classified either on nature or

function basis (para 99) - See examples in paras 102 & 103

If classifying by function, must disclose additional information on the nature of expenses, including depreciation, amortisation and employee benefits (para 104)

Must also disclose:Fees to auditors, disclosing separately fees for: audit,

audit-related aspects such as assurance work, tax and any other services (para NZ105.1)

Total donations made (para NZ105.2)

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RevenueRevenue must be presented separately on the face of

the Statement of Comprehensive IncomeNZ IAS 18 Revenue requires that the amount of each

significant category of revenue is presented separately and at minimum:Revenue from the sale of goodsRevenue from the rendering of services InterestRoyaltiesDividends

If any of the above include revenue arising from exchanges of goods and services, rather than being settled in cash, those amounts of revenue must be disclosed separately.

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Statement of Changes in Equity

This discloses total comprehensive income and changes in owner related equity

Specifically, the following is disclosed on the face of the statement (para 106):Total comprehensive income for the periodFor each component of equity, the effects of retrospective

application or restatement as per NZ IAS 8For each component of equity a reconciliation between the

opening and closing carrying amount, separately disclosing changes from profit or loss; each item of other comprehensive income; and transactions with owners (e.g. contributions and distributions)

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NotesNotes enhance the information in the financial

statements (para 7)

Each item on the face of the statements is cross-referenced to any related information in the Notes

Order of Notes (as per para 114):Statement of compliance with IFRSsSummary of significant accounting policiesSupporting information for items on face of statementsOther disclosures such as contingent liabilities,

unrecognised contractual commitments and non-financial disclosures (e.g. entity’s financial risk management objectives and policies)

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