Presentation on theme: "International Accounting Standard 1"— Presentation transcript:
1 International Accounting Standard 1 Presentation of Financial Statements
2 ObjectiveBasis 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 entitiesOverall requirements for presentation of financial statements, guidelines for their structure and minimum requirements for their content
3 Scope Financial Statements in accordance with IFRS Interim Financial Reporting (IAS 34) – Only Para appliesAll entities – CSF / SFS (IAS 27)Terminology used suitable for profit oriented entitiesEntities not having equity – FS presentation of members’ or unit holders’ interests
4 List of IFRSIFRS 1First-time Adoption of International Financial Reporting StandardsIFRS 2Share-Based PaymentIFRS 3Business CombinationIFRS 4Insurance ContractsIFRS 5Non-Current Assets Held for Sale and Discontinued OperationsIFRS 6Exploration for and Evaluation of Mineral ResourcesIFRS 7Financial Instruments- DisclosuresIFRS 8Operating Segment
5 List of IAS(IFRS) IAS 1 Presentation of Financial Instruments IAS 2 InventoriesIAS 7Cash Flow StatementIAS 8Accounting Policies, Changes in Accounting Estimates and ErrorsIAS 10Events after Reporting DateIAS 11Construction ContractsIAS 12Income TaxesIAS 16Property, Plant and EquipmentIAS 17LeasesIAS 18RevenueIAS 19Employee BenefitsIAS 20Accounting for Government Grant and Disclosure of Government AssistanceIAS 21The Effect of Changes in Foreign Exchange RateIAS 23Borrowing CostContd…
6 IAS 24Related Party DisclosureIAS 26Accounting and Reporting by retirement Benefits PlanIAS 27Consolidated and Separate Financial StatementsIAS 28Investments in AssociatesIAS 29Financial Reporting in Hyperinflationary EconomiesIAS 31Interest in Joint VenturesIAS 32Financial Instruments: PresentationIAS 33Earning Per ShareIAS 34Interim Financial ReportingIAS 36Impairment of AssetIAS 37Provisions, Contingent Liabilities and Contingent AssetsIAS 38Intangible AssetsIAS 39Financial Instruments: Recognition and MeasurementIAS 40Investment PropertyIAS 41Agriculture
7 Definitions General 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 needsImpracticableApplying a requirement is impracticable when the entity cannot apply it after making every reasonable effort do so.IFRSsStandards and Interpretations adopted by the IASB. They comprises: IFRS, IAS, Interpretation by IFRIC, SIC.Material Omissions or misstatements of itemsAre material if they could, individually or collectively, influence the economic decisions that users make on the basis of financial statements.NotesContain 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 incomeComprises items of income and expense (including reclassification adjustments) that are not recognized in profit or loss as required or permitted by other IFRSs.
8 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 BenefitsGains and losses arising from translating the financial statements of foreign operations (IAS 21 The Effects of Changes in Foreign Exchange RatesGain 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)
9 Definitions Owners Are holders of instruments classified as equity. Profit or LossIs the total of income less expenses, excluding the components of other comprehensive income.Reclassification adjustmentsare amounts reclassified to profit or loss in the current period that were recognized in the current or previous periods.Total Comprehensive IncomeIs 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’.
10 Complete set of financial statements A statement of financial position as at the end of the periodA statement of comprehensive income for the periodA statement of changes in equity for the periodA statement of cash flow for the periodNotes, comprising a summary of significant accounting policies and other explanatory informationA statement of financial position as at the beginning of the earliest comparative period
11 General Features Fair presentation and compliance with IFRSs Going ConcernAccrual basis of accountingMateriality and aggregationOffsettingFrequency of reportingComparative InformationConsistency of presentation
12 Fair presentation and compliance with IFRS Financial position, financial performance and cash flowExplicit and unreserved statement of complianceSelection and application of Accounting policies (IAS 8), presenting information to provide relevant, reliable, comparable and understandable information and Additional InformationInappropriate Accounting Policies
13 Fair presentation and compliance with IFRS Departure from IFRS – Extreme Circumstances' (Disclosure)Management conclusion about fair presentationCompliance with IFRS, except departure from particular requirement to achieve fair presentationTitle of departed IFRS, nature of departure, treatment IFRS requires, reason why treatment would misleadFinancial effect of the departure on each itemDeparture from requirement of IFRS in prior periodDeparture from IFRS but regulatory framework prohibits departureTitle of IFRS, nature of the requirement, reasonThe adjustments to each item in the financial statements that management has concluded would be necessary to achieve fair presentation
14 Going Concern Assessment of entity’s ability by management GCB unless contrary intention or no realistic alternative to liquidationDisclosure of UncertaintiesDisclosure when financial statements are not on going concern basis
15 Accrual Basis of Accounting An entity shall prepare its financial statements, except for cash flow information using the accrual basis of accounting.
16 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.
17 When offsetting reflects substance of the transaction or other event 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 eventDetracts 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.
18 Frequency of reporting At least annuallyIn case change in end of reporting period and presents financial statement for period longer or shorter than one year – disclosureThe reason for using a longer or shorter periodThe fact that amounts presented in the financial statements are not entirely comparable
19 Comparative Information For all amounts reported in current period’s financial statements except when IFRSs permit or require otherwiseWhen the entity changes the presentation or classification of items – Reclassification of comparative amounts – Disclosure:The nature of transactionThe amount of each item or class of items that is reclassified; andThe reason for reclassificationWhen impracticable to reclassify comparative amounts, an entity shall disclose:The reason for not reclassifying the amounts;The nature of adjustments that would have been made if the amounts had been reclassified
20 Consistency of presentation An entity shall retain the presentation and classification of items in financial statements from on period to the next unless:It is apparent, following a significant change in the nature of the entity’s operations or a review of its financial statements, that another presentation or classification would be more appropriate having regard to the criteria for the selection and appropriation of accounting policies in IAS 8 orAn IFRS requires a change in presentation
21 Structure and content Introduction Identification of the financial statementsStatement of financial positionStatement of comprehensive incomeStatement of changes in equityStatement of cash flowsNotesOther disclosures
22 Identification of the financial statements An entity shall clearly identifythe financial statements and distinguish them from other information in the same published documenteach financial statement and the notes.Display of information prominently, and repeat it when necessary for the information presented to be understandable:The name of reporting entity or other means of identification, and changes in that information from the end of the preceding reporting periodWhether the financial statements are of an individual entity or a group of entitiesThe date of the end of the reporting period or the period covered by the set of financial statements or notesThe presentation currency, as defined in IAS 21; andThe level of rounding used in presenting amounts in the financial statements.
23 Statement of financial position Information to be presented in the statement of financial positionCurrent / non current distinctionCurrent assetsCurrent liabilitiesInformation to be presented either in the statement of financial position or in the notes
24 Information to be presented in the statement of financial position Property, plant and equipmentInvestment propertyIntangible assetsFinancial assesInvestments accounted for using the equity methodBiological assetsTrade and other receivablesCash and cash equivalentsNon current assets held for sale and discontinued operationsTrade and other payablesProvisionsFinancial liabilitiesLiabilities and assets for current tax as defined in IAS 12Deferred tax liabilities and deferred tax assets as defined in IAS 12Liabilities included in disposal group classified as held for saleNon controlling interests, presented within equity; andIssued capital and reserves attributable to owners of the parent
25 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 entityDeferred tax assets (liabilities) not to be classified as current assets (liabilities)
26 Current / non current distinction Presentation of financial position by classification in current and non current assets, and current and non-current liabilities except:when a presentation based on liquidity provides information that is reliable and more relevant.When exception applies, in order of liquidity.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:No more than twelve months after the reporting period, andMore than twelve months after the reporting period
27 Current assetsEntity expects to realize the asset, or intends to sell or consume, in its normal operating cycle;It holds the asset primarily for the purpose of trading;It expects to realize the asset within twelve months after reporting period; orThe 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 periodAll other assets as non current
28 Current liabilitiesEntity expects to settle the liability in its normal operating cycle;It holds the liability primarily for the purpose of trading;The liability is due to be settled within twelve months after reporting period; orThe entity does not have an unconditional right to defer settlement of liability for at least twelve months after the reporting periodAll other liabilities as non current
29 Specific Discussion (Para 70-76) Trade payables, accrual for employees and other operating costs – Normal operating cycleOther 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 periodDiscretion of entity to refinance / roll over obligationBreach of provision of long term loan arrangementEvents after the Reporting Period (IAS 1)
30 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 capitalDescription of the nature and purpose of each reserve within equity
31 Statement of comprehensive income Information to be presented in the statement of comprehensive incomeProfit or loss for the periodOther comprehensive income for the periodInformation to be presented in the statement of comprehensive income or in notes
32 Analysis of Expenses ‘Nature of expenses’ method ‘Function of expenses’ method
33 Statement of Changes in equity Total comprehensive income for the periodEffect of retrospective application or retrospective restatement (IAS 8)Reconciliation between the carrying amount at the beginning and the end of the periodDividend distributed per share
35 Notes Structure Disclosure of Accounting Policies Sources of estimation uncertaintyCapitalOther disclosures
36 Notes - StructureBasis of preparation of the financial statements and the specific accounting policiesInformation required by IFRSs that is not presented elsewhere in the financial statementsInformation relevant to an understanding of financial statementsSystemic manner, cross reference
37 Notes: Disclosure of Accounting Policies Measurement basis used in preparing the financial statementsOther accounting policies used that are relevant to an understanding of FSJudgments that management has made in the process of applying the entity’s accounting policies
38 Notes: Sources of estimation uncertainty Information about the assumptionMajor sources of estimation uncertaintyCapitalAn entity shall disclose information that enables users of its financial statements to evaluate the entity’s objectives, policies and processes for managing capital
39 Notes: Other disclosures An entity shall disclose in the notes:Dividend proposed or declaredAmount of any cumulative preference dividends not recognizedDomicile and legal form of the entity, its country of incorporation and the address of its registered officeDescription of nature of the entity’s operations and its principal activitiesName of the parent and the ultimate parent of the group