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IAS 1 - Presentation Slides

IAS 1 establishes requirements for presenting general purpose financial statements to ensure comparability. It requires financial statements to provide a structured representation of an entity's financial position, performance, and cash flows. Financial statements must be presented fairly in accordance with the accrual basis of accounting, going concern assumption, consistency of presentation, materiality, and aggregation. The minimum requirements for a complete set of financial statements are statements of financial position, comprehensive income, changes in equity, and cash flows, along with accompanying notes.

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127 views16 pages

IAS 1 - Presentation Slides

IAS 1 establishes requirements for presenting general purpose financial statements to ensure comparability. It requires financial statements to provide a structured representation of an entity's financial position, performance, and cash flows. Financial statements must be presented fairly in accordance with the accrual basis of accounting, going concern assumption, consistency of presentation, materiality, and aggregation. The minimum requirements for a complete set of financial statements are statements of financial position, comprehensive income, changes in equity, and cash flows, along with accompanying notes.

Uploaded by

Ndila mangaliso
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PPTX, PDF, TXT or read online on Scribd
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IAS 1

Presentation of financial statements


Objective of IAS 1
• Present general-purpose financial statements so
that comparability is achieved between the entity’s
financial statements and
• Its own financial statements in previous periods
• Other entities’ financial statements
• The purpose of FS is to provide a structured
representation of an entity’s
• Financial position
• Performance
• Management’s stewardship of the resources
General features of Financial
statements
Fair Pr & Going Accrual
compliance concern basis

Materiality &
Aggregation

Comparati
Frequency
ve
Offsetting of
informatio
reporting
n
Fair
presentation &
compliance
Consistency Going
of concern
Presentation

Comparative Financial Accrual


information Statement basis

Frequency of Materiality &


reporting aggregation

Offsetting
Complete Set of Financial
Statements
• Statement of financial position (SFP)
• Statement of comprehensive income (SOCI)
• Statement of changes in equity (SCE)
• Cash flow statement (CF)- IAS 7
• Notes to the financial statements
Statement of financial position
Current vs Non-
current A/L

A= OE + L
Statement of comprehensive
income
Items to consider when preparing SOCI

• Single statement layout or Choice


- Includes P&L and OCI section
- Must include 3 totals: P/L; OCI; TCI
• two statement layout
- Presents P&L and SOCI separately
- include 3 totals: P/L; OCI; TCI
Going forward , assume single
statement layout
Nature vs function

Which method will give


you the highest profit?
Single statement layout- SOCI
Two statement layout- SOCI
SOCI- Analysis of expenses
• Function Method
- Expenses are allocated according to their purpose (tasks)
- Main functions are:
- Selling expenses
- Distribution Choice
- Administration
- Other operating expenses
• Nature Method Reliable and relevant
- No allocation is done information
- Suitable for smaller businesses
- Additional disclosure note is required i.t.o. IAS1.97
Statement of Changes in equity
• Presents Reconciliation b/n opening and closing
balances for each component of equity
• Presents separately OCI, P&L and TCI
• Presents transactions to owners separately( e.g.
dividends , share issue)
• Presents any retrospective adjustments to equity
Adjusting to prior year profit or loss

Prospective Retrospective

Adj the current year P&L Adj the prior year P& L

Retained Earnings

Separate line in SCE


Notes to the financial
statements

• Contain information in addition to each statement


• Support the items that are disclosed in the face of
AFS
• Cross- referenced
Pre-reading
• Capital management
• Dividends
• Accounting process- take one transaction (of
choice) from the beginning of the accounting
process, post it to the relevant ledgers until it is
presented in the financial statements.

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