Ias 1

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.
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 Issued capital and reserves attributable to owners of the parent Investment property
Intangible assets
Non-controlling interests
Financial assets
Financial Liabilities
Investments accounted for using equity method
Provisions
Biological assets
Inventories
Trade and other receivables
Trade and other payables
Cash and cash equivalents
ASSETS
EQUITY AND LIABILITIES
Totals of assets in accordance withIFRS 5 Non-current assets Held for Sale and Discontinued Operations
Totals of liabilities in accordance withIFRS 5 Non-current assets Held for Sale and Discontinued Operations
Current tax assets
Current tax liabilities
Deferred tax assets
Deferred 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
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
PROFIT OR LOSS
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:
o
those resulting from profit or loss
o o
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.

Ias 1

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Financial Statements

Structure and Content

EQUITY AND LIABILITIES

Investments accounted for using equity method

Trade and other receivables

Trade and other payables

Cash and cash equivalents

EQUITY AND LIABILITIES

Current tax assets

Current tax liabilities

Deferred tax assets

Deferred tax liabilities

OTHER COMPREHENSIVE INCOME

Each component of other comprehensive income classified by nature

attributable to non-controlling interests and

those resulting from profit or loss

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