AS 1 Presentation of Financial Statements represents a basis of the whole IFRS

reporting, as it sets overall requirements for the presentation of financial

statements, guidelines for their structure and minimum requirements for their
content.

Financial Statements

Purpose of the financial statements is to provide information about the financial

position, financial performance and cash flows of an entity that is useful to a wide
range of users in making economic decisions.

The complete set of financial statements compliant with IFRS comprises 5 elements:

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 flows for the period
notes containing a summary of significant accounting policies and other explanatory
information.
If some accounting policy is applied retrospectively, or some retrospective
restatements or reclassifications were made, then also a statement of financial
position as at the beginning of the earliest comparative period shall be presented.

Special For You! Have you already checked out the IFRS Kit? Its a full IFRS learning
package with more than 30 hours of private video tutorials, more than 100 IFRS
case studies solved in Excel, more than 120 pages of handouts and many bonuses
included. If you take action today and subscribe to the IFRS Kit, youll get it at
discount! Click here to check it out!

IAS 1 explains the general features of financial statements, such as fair presentation
and compliance with IFRS, going concern, accrual basis of accounting, materiality
and aggregation, offsetting, frequency of reporting, comparative information and
consistency of presentation.

Structure and Content

IAS 1 requires identification of the financial statements and distinguishing them

from other information in the same published document.

Every element of the financial statements shall contain the name of the reporting
entity, the information whether the financial statements are of an individual or of a
group, the date of the reporting entity and period covered, the presentation
currency and the level of rounding (thousands, millions).

IAS 1 lists the minimum content to be presented in the financial statements, except
for the statement of cash flows (subject to IAS 7). So lets look at it in a detail.

Statement of Financial Position

Before significant amendments of IAS 1, this statement was simply called balance
sheet, however, it was renamed.

IAS 1 requires presentation of classified statement of financial position where

current assets or liabilities are separated from non-current assets or liabilities.
Basically, the asset or liability is current when it is expected to be recovered or
settled within 12 months after the reporting period.

With regard to a minimum content, the following line items shall be presented:

ASSETS

EQUITY AND LIABILITIES

Property, plant and equipment

of the parent

Issued capital and reserves attributable to owners

Investment property
Intangible assets

Non-controlling interests

Financial assets

Financial Liabilities

Investments accounted for using equity method

Biological assets

Provisions

Inventories
Trade and other receivables

Trade and other payables

Cash and cash equivalents

Totals of assets in accordance with IFRS 5 Non-current assets Held for Sale and
Discontinued Operations Totals of liabilities in accordance with IFRS 5 Non-current
assets Held for Sale and Discontinued Operations
Current tax assets Current tax liabilities
Deferred tax assetsDeferred tax liabilities
Further subclassifications of the line items shall be disclosed either directly in the
statement of financial position or in the notes, such as disaggregation of property,
plant and equipment into classes, and similar. Also, certain information related to
the share capital, reserves and a few others shall be included in the statement of
financial position, the statement of changes in equity or in the notes.

IAS 1 does NOT prescribe the precise format of the statement of financial position.
Instead, several formats are acceptable if they fulfill all requirements outlined
above.

Statement of Comprehensive Income

The statement of comprehensive income has 2 basic elements:

Profit or loss for the period: here, all items of income and expenses must be
recognized.
Other comprehensive income: items recognized directly to equity or reserves, such
as changes in revaluation surplus, gains or losses from subsequent measurement of
available-for-sale financial assets, etc.
As a minimum, the statement of comprehensive income must contain the following
items:

PROFIT OR LOSS
Revenue
Gains and losses arising from the derecognition of financial assets at amortized cost
Finance costs

Share of the profit or loss of associates and joint ventures accounted for using the
equity method
Tax expense
Post-tax profit/gain or loss of operations or assets in accordance with IFRS 5 (Noncurrent assets Held for Sale and Discontinued Operations)
Profit or loss
OTHER COMPREHENSIVE INCOME
Each component of other comprehensive income classified by nature
Share of the other comprehensive income of associates and joint ventures
accounted for using equity method
Total comprehensive income
As opposed to US GAAP, IAS 1 prohibits to report any transaction or item as
extraordinary items.

Profit or loss for the period, as well as total comprehensive income shall be both
presented in allocation:

attributable to non-controlling interests and

attributable to owners of the parent.
The entity might choose to classify expenses recognized in profit or loss for the
period by their nature or by their function.

IAS 1 requires disclosure of certain items separately, either in the statement of

comprehensive income, or in the notes. These items are as follows: write-downs of
inventories and property, plant and equipment, their reversals, restructuring of
activities and reversals of related provisions, disposals of property, plant and
equipment, disposals of investments, discontinuing operations, litigation
settlements and other reversals of provisions.

Statement of Changes in Equity

As a minimum, the statement of changes in equity must contain the following items:

total comprehensive income for the period, showing separately amounts

attributable to owners of the parent and to non-controlling interests
the effect of retrospective application or restatement for each component of equity
(if applicable)
the reconciliation between the carrying amount at the beginning and the end of the
period for each
component of equity. Here, the following changes shall be disclosed separately:
those resulting from profit or loss
resulting from other comprehensive income
resulting from transactions with owners (contributions, distributions and changes in
ownership)
Also, IAS 1 prescribes to present amount of dividends recognized as distributions
and the related amount per share on the face of the statement of changes in equity
or in the notes.

Notes to the Financial Statements

The notes are meant to be the document accompanying numerical financial

statements listed above. They should provide additional information not contained
in the numbers, the basis of preparation of the financial statements and some
additional information that might be relevant.

IAS 1 sets that the notes shall contain a statement of compliance with IFRS,
summary of significant accounting policies applied, supporting information for the
numbers presented in the financial statements and other disclosures.