PAS 1: PRESENTATION OF FINANCIAL STATEMENTS a statement of profit or loss and other comprehensive
income for the period (presented as a single statement, or by
OBJECTIVE OF PAS 1/IAS 1 presenting the profit or loss section in a separate statement of
To ensure comparability: profit or loss, immediately followed by a statement presenting
1. With entity's financial statements of previous period ( intra comprehensive income beginning with profit or loss)
- comparability ) a statement of changes in equity for the period
2. With financial statements of other entities within same a statement of cash flows for the period
industry ( inter- comparability ) Notes, comprising a summary of significant accounting policies
and other explanatory notes comparative information prescribed
PAS 1(IAS1) PRESCRIBED HOW THE FINANCIAL STATEMENTS by the standard.
SHOULD BE PREPARED TO ENSURE COMPARABILITY:
PAS 1 (IAS 1) sets out: General purpose financial statements are those intended to serve
Definitions affecting the financial statements users who are not in a position to require financial reports tailored to their
General Features (characteristics) the financial statements particular information needs.
should have
Basic Structure of FS, which part should be included in the FS Material Information. It is material if omitting, misstating or obscuring
it could reasonably be expected to influence decisions that the primary
Contents of FS, minimum line items to be included in the FS
users of general purpose financial statements make on the basis of those
o PAS 1, Does not prescribed specific FORMAT for FS
financial statements, which provide financial information about a
specific reporting entity
Scope
PAS 1 applies to all general purpose financial statements that are Reporting period. There is a presumption that financial statements will
prepared and presented in accordance with International Financial be prepared at least annually. If the annual reporting period changes and
Reporting Standards (IFRSs). [IAS 1.2] financial statements are prepared for a different period, the entity must
disclose the reason for the change and state that amounts are not
entirely comparable.
Objective of financial statements
The objective of general purpose financial statements is to Current assets are assets that are:
provide information about the financial position, financial performance, • expected to be realized in the entity's normal operating
and cash flows of an entity that is useful to a wide range of users in cycle
making economic decisions. • held primarily for the purpose of trading
• expected to be realized within 12 months after the
Components of financial statements reporting period.
A complete set of financial statements includes: [IAS • cash and cash equivalents (unless restricted).
1.10]
a statement of financial position (balance sheet) at the end of
the period
An operating cycle refers to the time it takes a company to buy goods, Total comprehensive income is defined as "the change in equity
sell them and receive cash from the sale of said goods. In other words, during a period resulting from transactions and other events, other than
it's how long it takes a company to turn its inventories into cash. those changes resulting from transactions with owners in their capacity
as owners"
Current liabilities are those:
• expected to be settled within the entity's normal operating cycle Fair presentation requires the faithful representation of the effects of
• held for purpose of trading transactions, other events, and conditions in accordance with the
• due to be settled within 12 months definitions and recognition criteria for assets, liabilities, income and
• for which the entity does not have the right at the end of the expenses set out in the Framework
reporting period to defer settlement beyond 12 months.
GOING CONCERN, The Conceptual Framework notes that financial
statements are normally prepared assuming the entity is a going concern
Other liabilities are non-current. and will continue in operation for the foreseeable future.
When a long-term debt is expected to be refinanced under an
existing loan facility, and the entity has the discretion to do so, the ACCRUAL ACCOUNTING, PAS 1 requires that an entity prepare its
debt is classified as non-current, even if the liability would otherwise financial statements, except for cash flow information, using the accrual
be due within 12 months. basis of accounting.
CONSISTENCY, The presentation and classification of items in the
Other liabilities are current financial statements shall be retained from one period to the next unless
If a liability has become payable on demand because an entity a change is justified either by a change in circumstances or a
has breached an undertaking under a long-term loan agreement on or requirement of a new IFRS.
before the reporting date, the liability is current, even if the lender has
agreed, after the reporting date and before the authorization of the AGGREGATION. Each material class of similar items must be presented
financial statements for issue, not to demand payment as a consequence separately in the financial statements. Dissimilar items may be
of the breach. However, the liability is classified as non-current if the aggregated only if they are individually immaterial.
lender agreed by the reporting date to provide a period of grace ending
at least 12 months after the end of the reporting period, within which OFFSETTING, Assets and liabilities, and income and expenses, may not
the entity can rectify the breach and during which the lender cannot be offset unless required or permitted by an IFRS
demand immediate repayment.
Comparative information
Profit or loss is defined as "the total of income less expenses, excluding PAS 1 requires that comparative information to be disclosed in
the components of other comprehensive income respect of the previous period for all amounts reported in the financial
statements, both on the face of the financial statements and in the notes,
unless another Standard requires otherwise. Comparative information is
Other comprehensive income is defined as comprising "items of provided for narrative and descriptive where it is relevant to
income and expense (including reclassification adjustments) that are not understanding the financial statements of the current period.
recognized in profit or loss as required or permitted by other IFRSs"
A third statement of financial position is required to be presented if (o) deferred tax liabilities and deferred tax assets, as defined in IAS
the entity retrospectively applies an accounting policy, restates items, or 12
reclassifies items, and those adjustments had a material effect on the (p) liabilities included in disposal groups
information in the statement of financial position at the beginning of the (q) non-controlling interests, presented within equity
comparative period. (r) issued capital and reserves attributable to owners of the parent.
PAS 1 requires an entity to clearly identify: The following minimum line items must be presented in the profit or
• the financial statements, which must be distinguished from loss section (or separate statement of profit or loss, if presented):
other information in a published document each financial • revenue
statement and the notes to the financial statements. • gains and losses from the derecognition of financial
• In addition, the following information must be displayed assets measured at amortized cost
prominently, and repeated as necessary: • finance costs
- the name of the reporting entity and any change in the name • share of the profit or loss of associates and joint ventures
- whether the financial statements are a group of entities or an accounted for using the equity method
individual entity • certain gains or losses associated with the
- information about the reporting period reclassification of financial assets
- the presentation currency (as defined by IAS 21 The Effects of • tax expense
Changes in Foreign Exchange Rates) • a single amount for the total of discontinued items
- the level of rounding used (e.g. thousands, millions).
Other comprehensive income section
The line items to be included on the face of the statement of financial The other comprehensive income section is required to present
position are: line items which are classified by their nature, and grouped between
(a) property, plant and equipment those items that will or will not be reclassified to profit and loss in
(b) investment property subsequent periods.
(c) intangible assets An entity's share of OCI of equity-accounted associates and joint
(d) financial assets (excluding amounts shown under (e), (h), and (i)) ventures is presented in aggregate as single line items based on whether
(e) investments accounted for using the equity method or not it will subsequently be reclassified to profit or loss.
(f) biological assets
(g) inventories Statement of Cash Flows, prescribed under PAS 7.
(h) trade and other receivables
(i) cash and cash equivalents Statement of changes in equity
(j) assets held for sale PAS 1 requires an entity to present a separate statement of
(k) trade and other payables changes in equity.
(l) provisions The statement must show:
(m) financial liabilities (excluding amounts shown under (k) and (l))
(n) current tax liabilities and current tax assets, as defined in IAS 12
• total comprehensive income for the period, showing separately d. other disclosures, including:
amounts attributable to owners of the parent and to non- - contingent liabilities (see IAS 37) and unrecognized contractual
controlling interests commitments
• the effects of any retrospective application of accounting policies - non-financial disclosures, such as the entity's financial risk
or restatements made in accordance with IAS 8, separately for management objectives and policies
each component of other comprehensive income
• reconciliations between the carrying amounts at the beginning
and the end of the period for each component of equity,
separately disclosing:
- profit or loss
- other comprehensive income*
- transactions with owners, showing separately
contributions by and distributions to owners and changes in ownership
interests in subsidiaries that do not result in a loss of control
The following amounts may also be presented on the face of the
statement of changes in equity, or they may be presented in the
notes:
* amount of dividends recognized as distributions
* the related amount per share.
NOTES to FS:
Aside from the general information regarding the reporting
entity, the following Notes should normally be presented in the
following order:
a. a statement of compliance with IFRSs
b. a summary of significant accounting policies applied, including:
- the measurement basis (or bases) used in preparing the
financial statements
- the other accounting policies used that are relevant to an
understanding of the financial statements
c. supporting information for items presented on the face of the
statement of financial position (balance sheet), statement(s) of profit or
loss and other comprehensive income, statement of changes in equity
and statement of cash flows, in the order in which each statement and
each line item is presented
