1. Presentation of Financial Statements (LKAS 01)
Rangajewa Herath
B.Sc. Accountancy and Financial Management(Sp.) (Hons.) (USJ) ,
Master of Business Administration -PIM(USJ)

2. LKAS 1 - Presentation of Financial Statements prescribes the basis for the presentation of general purpose financial statements for public limited companies.
It sets out the overall requirements for presentation of financial statements, guideline for structure

3. General purpose financial statements
General Purpose Financial Statements are the financial statements those intended to meet the needs of users who are not in a position to require an entity to require an entity to prepare reports tailored to their particular information needs.

4. Objectives of Financial Statements
The objective of financial statements is to provide information about the financial position, financial performance and cash flows of an entity to wide range of users in making economic decisions.

5. Financial statements provides information about an entity’s
Assets;
Liabilities;
Equity;
Income and expenses;
Contribution from and distribution to owners in their capacity of owners; and
Cash flows

6. Complete Set of Financial Statements
The components of a complete set of financial statements are;
Statement of Financial Position
Statement of profit or loss and other comprehensive Income
Statement of Changes in Equity
Statement of Cash Flows
Notes, including a summary of significant accounting policies and other explanatory information
A statement of financial position at the beginning of the earliest comparative period when an entity applies an accounting policy retrospectively or makes a retrospective restatement of items in its financial statements.

7. Statement of Profit or Loss and Other Comprehensive Income
Other comprehensive income comprises items of income and expenses that are not recognized in profit or loss as required or permitted by other SLFRS. Profit or loss is the total income less expenses excluding the components of other comprehensive income.

8. Other Comprehensive Income
Changes in revaluation surplus.
Gains or losses arising from translating the Financial Statements of a foreign operation.
Gains or losses on re-measuring available-for-sale financial assets.
The effective portion of gains and losses on hedging instruments in a cash flow hedges.
Actuarial gains and losses on defined benefit plans.

9. Total Comprehensive Income
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 = Profit or Loss + OCI Income

10. Going concern
When preparing financial statements, management shall make an assessment of the entity’s ability to continue as going concern. An entity should prepare the financial statements on going concern basis unless the management either intends to liquidate the business or cease trading, or has no realistic alternative but to do so.

11. Accrual Basis of Accounting
An entity should prepare its financial statements, except for the cash flow information, on accrual basis.

12. Materiality and Aggregation
Each material class of similar items should be separately presented. Immaterial items can be aggregated and presented according to either their nature or function.

13. Offsetting
An entity shall not offset assets and liabilities or income and expenses, unless required or permitted by an SLFRS.

14. Comparative Information
An entity should disclose comparative information in respect of the previous period for all amounts reported in the current period’s Financial Statements.

15. Assets are resources controlled by the business as a result of past event of which future economic benefits are expected to flow to the entity.

16. Accounting Policies, Changes in Accounting Estimates and Errors
(LKAS 08)

17. Accounting policies
Accounting policies are the specific principles, bases, conventions, rules and practices applied by an entity in preparing and presenting financial statements.

18. Selection of Accounting Policies
Accounting policies should be selected using the following methods.
(1)Use of Accounting standard
(2)Based on management Judgment

19. Changes in Accounting Policies
An entity shall change an accounting policy only if the change:
  (a) is required by a Standard; or
  (b) results in the financial statements providing reliable and more relevant information about the effects of transactions, other events or conditions on the entity's financial position, financial performance or cash flows.

20. Accounting for Changes in Accounting Policies
Retrospective application is applying a new accounting policy to transactions, other events and conditions as if that policy had always been applied.

21. Changes in Accounting Estimates
Examples
(1) useful assets of an asset
(2) Residual value of an asset
(3) Depreciation method
(4) Impairment of receivables
(6) Net realizable value
(7) Provision for warranty
(8) Provision for claim

22. Accounting for changes in Accounting Estimates
The effect of a change in an accounting estimate shall be recognized prospectively by including it in profit or loss in:
(a) the period of the change, if the change affects that period only; or
(b) the period of the change and future periods, if the change affects both.

23. Errors
Prior period errors are omissions from, and misstatements in, the entity's financial statements for one or more prior periods arising from a failure to use, or misuse of, reliable information that:
(a) was available when financial statements for those periods were authorized for issue; and
(b) could reasonably be expected to have been obtained and taken into account in the preparation and presentation of those financial statements.