IAS 1: Financial Statement Presentation Standards

International Accounting Standard No 1: Presentation of Financial Statements

Aim

1. The objective of this Standard is to establish the basis for filing financial statements with general purpose, to ensure that they are comparable, both with the financial statements of the same entity for prior periods, as with those of other entities. To achieve this objective, this Standard establishes, first, general requirements for filing financial statements, and then provides guidelines for determining their structure, while laying down minimum requirements on their content.

Scope

This Standard applies to all types of financial statements for purposes of general information that are processed and presented in accordance with International Financial Reporting Standards (IFRS).

Purpose of Financial Statements

The financial statements are a structured representation of the financial position and financial performance of an entity. The objective of general purpose financial statements is to provide information about the financial position, financial performance, and cash flows of the entity that is useful to a wide variety of users in making economic decisions.

Components of Financial Statements

A complete set of financial statements includes the following components:

• (a) Balance sheet;
• (b) Income statement;
• (c) A statement of changes in equity showing either:
  1. All changes in equity, or
  2. Changes in equity other than those arising from transactions with owners thereof, when acting as such;
• (d) Cash flow statement; and
• (e) Notes, which will include a summary of significant accounting policies and other explanatory notes.

Materiality (or relative importance). Omissions or misstatements of items are material or have material importance if they can, individually or collectively, influence the economic decisions made by users based on the financial statements.

Hypothesis of a Going Concern

In preparing the financial statements, management will evaluate the ability of the entity to continue in operation. The financial statements are prepared under the assumption of a going concern, unless management intends to liquidate the entity or cease trading, or there is no other realistic alternative but to proceed in one of these ways.

Offsetting

No assets will be offset with liabilities, nor income with expenses, except when offsetting is required or permitted by any Standard or Interpretation.

Comparative Information

Unless a Standard or Interpretation permits or requires otherwise, comparative information on the prior period presented, for all kinds of quantitative information included in the financial statements.