International Accounting

Standard 1

Presentation of Financial

Statements

Objective

Basis for presentation of general purpose financial statements

to ensure comparability with the

entity’s financial statements of

previous periods and with the financial

statements of other entities

Overall requirements for presentation of

financial statements, guidelines for their

structure and minimum

requirements for their content

Scope

Financial Statements in accordance with IFRS

Interim Financial Reporting (IAS 34) – Only Para 15-35 applies

All entities – CSF / SFS (IAS 27)

Terminology used suitable for profit oriented entities

Entities not having equity – FS presentation of members’ or unitholders’ interests

List of IFRSIFRS 1 First Time Adoption of International

Financial Reporting Standards

IFRS 2 Share based Payment

IFRS 3 Business Combination

IFRS 4 Insurance Contracts

IFRS 5 Non current assets held for sale and

discontinued operations

IFRS 6 Exploration for and Evaluation of Mineral

Resources

IFRS 7 Financial Instruments: Disclosure

IFRS 8 Operating Segments

List of IFRS (IAS)IAS 1 Presentation of Financial Statements

IAS 2 Inventories

IAS 7 Statement of Cash Flows

IAS 8 Accounting Policies, Changes in Accounting

Estimates and Errors

IAS 10 Events after Reporting Periods

IAS 11 Construction Contracts

IAS 12 Income Taxes

IAS 16 Property, Plant and Equipment

IAS 17 Leases

IAS 18 Revenue

IAS 19 Employee Benefits

IAS 20 Accounting for Governemnt Grants and

Disclosure of Government Assistance

List of IFRS (IAS)IAS 21 The Effect of Changes in Foreign Exchange Rates

IAS 23 Borrowing Costs

IAS 24 Related Party Disclosure

IAS 26 Accounting and Reporting by Retire Benefit Plans

IAS 27 Consolidated and Separate Financial Statements

IAS 28 Investment in Associates

IAS 29 Financial Reporting in Hyperinflationary Economies

IAS 31 Interests in Joint Ventures

IAS 32 Financial Instruments: Presentation

IAS 33 Earnings Per Share

IAS 34 Interim Financial Reporting

IAS 36 Impairment of Assets

IAS 37 Provisions, Contingent Liabilities and Contingent Assets

List of IFRS (IAS)

IAS 38 Intangible Assets

IAS 39 Financial Instruments: Recognition and Measurement

IAS 40 Investment Property

IAS 41 Agriculture

DefinitionsGeneral Purpose

Financial

Statements

Those intended to meet the needs of users who are

not in a position to require an entity to prepare

reports tailored to their particular information needs

Impracticable Applying a requirement is impracticable when the entity

cannot apply it after making every reasonable effort do

so.

IFRSs Standards and Interpretations adopted by the IASB. They

comprises: IFRS, IAS, Interpretation by IFRIC, SIC.

Material Omissions

or misstatements

of items

Are materail if they could, individually or collectively,

influence the economic decisions that users make on the

basis of financial statements.

Notes Contain information in addition to that presented in the

statement of financial position, statement of

comprehensive income, separate income statement(if

presented), statement of changes in equity and statement

of cash flows.

Other

comprehensive

income

Comprises items of income and expense (including

reclassification adjustments) that are not recognized in

profit or loss as required or permitted by other IFRSs.

Components of other

comprehensive income

Changes in revaluation surplus (IAS 16 Property, Plant and Equipment and IAS 38 Intangible Asset)

Actuarial gains and losses on defined benefit plans recognized in accordance with para 93A of IAS 19

Employee Benefits

Gains and losses arising from translating the financial statements of foreign operations (IAS 21 The Effects of

Changes in Foreign Exchange Rates

Gain and losses on remeasuring available for sale financial assets (IAS 39 Financial Instruments:

Recognition and Measurement)

The effective portion of gains and losses on hedging instruments in cash flow hedge (IAS 39)

Definitions

Owners Are holders of instruments classified as equity.

Profit or Loss Is the total of income less expenses, excluding the

components of other comprehensive income.

Reclassification

adjustments

are amounts reclassified to profit or loss in the current

period that were recognized in the current or previous

periods.

Total Comprehensive

Income

Is the change in equity during a period resulting from

transactions and other events, other than those

changes resulting from transactions with owners in their

capacity as owners.

Total comprehensive income comprises all components

of ‘profit or loss’ and of ‘other comprehensive income’.

Complete set of financial statements

A statement of financial position as at the end of the period

A statement of comprehensive income for the period

A statement of changes in equity for the period

A statement of cash flow for the period

Notes, comprising a summary of significant accounting policies and other explanatory information

A statement of financial position as at the beginning of the earliest comparative period

General Features

Fair presentation and compliance with

IFRSs

Going ConcernAccrual basis of

accounting

Materiality and aggregation

OffsettingFrequency of

reporting

Comparative Information

Consistency of presentation

Fair presentation and compliance with IFRS

Financial position, financial performance and cash flow

Explicit and unreserved statement of compliance

Selection and application of Accounting policies (IAS 8), presenting information to provide relevant, reliable, comparable

and understandable information and Additional Information

Inappropriate Accounting Policies

Fair presentation and compliance with IFRS

• Management conclusion about fair presentation

• Compliance with IFRS, except departure from particular requirement to achieve fair presentation

• Title of departed IFRS, nature of departure, treatment IFRS requires, reason why treatment would mislead

• Financial effect of the departure on each item

Departure from IFRS – Extreme Circumstances'

(Disclosure)

Departure from requirement of IFRS in prior period

• Title of IFRS, nature of the requirement, reason

• The adjustments to each item in the financial statements that management has concluded would be necessary to achieve fair presentation

Departure from IFRS but regulatory framework prohibits

departure

Going Concern

Assessment of entity’s ability by management

GCB unless

contrary intention or no realistic alternative

to liquidation

Disclosure of Uncertainties

Disclosure when

financial statements are not on

going concern

basis

Accrual Basis of Accounting

An entity shall prepare its financial

statements, except for cash flow

information using the accrual basis

of accounting.

Materiality and aggregation

An entity shall present separately each material class of similar items. It

shall present separately items of a dissimilar nature or function unless they

are immaterial.

Offsetting

An entity shall not offset assets and liabilities or income and expense, unless required or permitted by an IFRS except:

When offsetting reflects substance of the transaction

or other event

Detracts from ability of users both to understand the

transaction, other events and conditions that have occurred

and to assess the entity’s future cash flows.

Frequency of reporting

At least annually

• The reason for using a longer or shorter period

• The fact that amounts presented in the financial statements are not entirely comparable

In case change in end of

reporting period and presents

financial statement for

period longer or shorter than one year – disclosure

Comparative InformationFor all amounts reported in current period’s financial statements

except when IFRSs permit or require otherwise

• The nature of transaction

• The amount of each item or class of items that is reclassified; and

• The reason for reclassification

When the entity changes the

presentation or classification of items – Reclassification of

comparative amounts – Disclosure:

• The reason for not reclassifying the amounts;

• The nature of adjustments that would have been made if the amounts had been reclassified

When impracticable to reclassify comparative

amounts, an entity shall disclose:

Consistency of presentation

• It is apparent, following a significantchange in the nature of the entity’soperations or a review of its financialstatements, that another presentationor classification would be moreappropriate having regard to the criteriafor the selection and appropriation ofaccounting policies in IAS 8 or

• An IFRS requires a change inpresentation

An entity shall retain the

presentation and

classification of items in financial

statements from on

period to the next unless:

Structure and content

IntroductionIdentification of

the financial statements

Statement of financial position

Statement of comprehensive

income

Statement of changes in

equity

Statement of cash flows

NotesOther

disclosures

Identification of the financial statements

• the financial statements and distinguish them from other information in the same published document

• each financial statement and the notes.

An entity shall clearly identify

• The name of reporting entity or other means of identification, and changes in that information from the end of the preceding reporting period

• Whether the financial statements are of an individual entity or a group of entities

• The date of the end of the reporting period or the period covered by the set of financial statements or notes

• The presentation currency, as defined in IAS 21; and

• The level of rounding used in presenting amounts in the financial statements.

Display of information prominently, and repeat it

when necessary for

the information presented to be understandable:

Statement of financial position

Information to be presented in the

statement of financial position

Current / non current distinction

Current assets

Current liabilities

Information to be presented either in the statement of

financial position or in the notes

Information to be presented in the statement of

financial position

Property, plant and equipment

Investment property Intangible assets Financial asses

Investments accounted for using the equity method

Biological assetsTrade and other

receivablesCash and cash

equivalents

Non current assets held for sale and

discontinued operations

Trade and other payables

Provisions Financial liabilities

Liabilities and assets for current tax as defined in IAS 12

Deferred tax liabilities and

deferred tax assets as defined in IAS 12

Liabilities included in disposal group

classified as held for sale

Non controlling interests, presented within equity; and

Issued capital and reserves attributable

to owners of the parent

Information to be presented in the

statement of financial position

Additional Line items, heading and subtotals in the

statement of financial position when such

presentation is relevant to an understanding of the

entity

Deferred tax assets (liabilities) not to be

classified as current assets (liabilities)

Current / non current distinction

• when a presentation based on liquidity provides information that is reliable and more relevant.

• When exception applies, in order of liquidity.

Presentation of financial position by classification

in current and non current assets, and current and

non-current liabilities except:

• No more than twelve months after the reporting period, and

• More than twelve months after the reporting period

Disclose amount expected to be recovered or settled after more than twelve months for each

asset and liability line item that combines amounts

expected to be recovered or settled:

Current assets

All other assets as non current

The asset is cash or cash equivalent (IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months

after the reporting period

It expects to realize the asset within twelve months after reporting period; or

It holds the asset primarily for the purpose of trading;

Entity expects to realize the asset, or intends to sell or consume, in its normal operating cycle;

Current liabilities

All other liabilities as non current

The entity does not have an unconditional right to defer settlement of liability for at least twelve months after the reporting period

The liability is due to be settled within twelve months after reporting period; or

It holds the liability primarily for the purpose of trading;

Entity expects to settle the liability in its normal operating cycle;

Specific Discussion (Para 70-76)

Trade payables, accrual for employees and other operating costs –Normal operating cycle

Other current liabilities – financial liabilities, bank overdrafts, current portion of NCL, dividends payable, income taxes and other non trade payables – Whether due for settlement within twelve months.

Original term of liability, refinance, reschedule agreement after reporting period

Discretion of entity to refinance / roll over obligation

Breach of provision of long term loan arrangement

Events after the Reporting Period (IAS 1)

Information to be presented either in the

statement of financial position or in the notes

Entity shall disclose, either in the statement of financial position or in the notes, further sub classification of the line items presented, classified in a

manner appropriate to the entity’s operations.

Sub-classification depends on the requirement of IFRSs, size, nature, functions of the amounts involved.

Information to be disclosed for each class of share capital

Description of the nature and purpose of each reserve within equity

Statement of comprehensive

income

• Information to be presented in the statement of

comprehensive income

• Profit or loss for the period

• Other comprehensive income for the period

• Information to be presented in the statement of

comprehensive income or in notes

Analysis of Expenses

• ‘Nature of expenses’ method

• ‘Function of expenses’ method

Statement of Changes in equity

• Total comprehensive income for the period

• Effect of retrospective application or

retrospective restatement (IAS 8)

• Reconciliation between the carrying

amount at the beginning and the end of

the period

• Dividend distributed per share

Statement of cash flows – IAS 7

Notes

• Structure

• Disclosure of Accounting Policies

• Sources of estimation uncertainty

• Capital

• Other disclosures

Notes - Structure

• Basis of preparation of the financial statements and the specific accounting policies

• Information required by IFRSs that is not presented elsewhere in the financial statements

• Information relevant to an understanding of financial statements

• Systemic manner, cross reference

Notes: Disclosure of Accounting Policies

• Measurement basis used in preparing the

financial statements

• Other accounting policies used that are

relevant to an understanding of FS

• Judgments that management has made in

the process of applying the entity’s

accounting policies

Notes: Sources of estimation uncertainty

• Information about the assumption

• Major sources of estimation uncertainty

Capital

An entity shall disclose information thatenables users of its financial statements toevaluate the entity’s objectives, policies andprocesses for managing capital

Notes: Other disclosures

• An entity shall disclose in the notes:

– Dividend proposed or declared

– Amount of any cumulative preference dividends not recognized

• Domicile and legal form of the entity, its country of incorporation and the address of its registered office

• Description of nature of the entity’s operations and its principal activities

• Name of the parent and the ultimate parent of the group