International Accounting Standard 1

Presentation of Financial Statements

Objective

Basis 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

entities

Overall requirements for presentation of financial statements, guidelines for their structure and

minimum requirements for their content

Scope

Financial Statements in accordance with IFRS

Interim Financial Reporting (IAS 34) – Only Para 15-35 applies

All entities – CSF / SFS (IAS 27)

Terminology used suitable for profit oriented entities

Entities not having equity – FS presentation of members’ or unit holders’ interests

IFRS 1 First-time Adoption of International Financial Reporting Standards

IFRS 2 Share-Based Payment

IFRS 3 Business Combination

IFRS 4 Insurance Contracts

IFRS 5 Non-Current Assets Held for Sale and Discontinued Operations

IFRS 6 Exploration for and Evaluation of Mineral Resources

IFRS 7 Financial Instruments- Disclosures

IFRS 8 Operating Segment

List of IFRS

IAS 1 Presentation of Financial Instruments

IAS 2 Inventories

IAS 7 Cash Flow Statement

IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

IAS 10 Events after Reporting Date

IAS 11 Construction Contracts

IAS 12 Income Taxes

IAS 16 Property, Plant and Equipment

IAS 17 Leases

IAS 18 Revenue

IAS 19 Employee Benefits

IAS 20 Accounting for Government Grant and Disclosure of Government Assistance

IAS 21 The Effect of Changes in Foreign Exchange Rate

IAS 23 Borrowing Cost

List of IAS(IFRS)

Contd…

IAS 24 Related Party Disclosure

IAS 26 Accounting and Reporting by retirement Benefits Plan

IAS 27 Consolidated and Separate Financial Statements

IAS 28 Investments in Associates

IAS 29 Financial Reporting in Hyperinflationary Economies

IAS 31 Interest in Joint Ventures

IAS 32 Financial Instruments: Presentation

IAS 33 Earning Per Share

IAS 34 Interim Financial Reporting

IAS 36 Impairment of Asset

IAS 37 Provisions, Contingent Liabilities and Contingent Assets

IAS 38 Intangible Assets

IAS 39 Financial Instruments: Recognition and Measurement

IAS 40 Investment Property

IAS 41 Agriculture

DefinitionsGeneral 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 needs

Impracticable Applying a requirement is impracticable when the entity cannot apply it after making every reasonable effort do so.

IFRSs Standards and Interpretations adopted by the IASB. They comprises: IFRS, IAS, Interpretation by IFRIC, SIC.

Material Omissions or misstatements of items

Are material if they could, individually or collectively, influence the economic decisions that users make on the basis of financial statements.

Notes Contain 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 income

Comprises items of income and expense (including reclassification adjustments) that are not recognized in profit or loss as required or permitted by other IFRSs.

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 Benefits

Gains and losses arising from translating

the financial statements of foreign

operations (IAS 21 The Effects of Changes in

Foreign Exchange Rates

Gain 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)

Definitions

Owners Are holders of instruments classified as equity.

Profit or Loss Is the total of income less expenses, excluding the components of other comprehensive income.

Reclassification adjustments

are amounts reclassified to profit or loss in the current period that were recognized in the current or previous periods.

Total Comprehensive Income

Is 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’.

Complete set of financial statements

A statement of comprehensive income for the period

A statement of changes in equity for the period

A statement of financial position as at the beginning of the earliest comparative period

General Features

Fair presentation and compliance

with IFRSs

Going Concern

Accrual basis of accounting

Materiality and

aggregationOffsetting

Frequency of reporting

Comparative Information

Consistency of

presentation

Fair presentation and compliance with IFRS

Financial position, financial performance

and cash flow

Explicit and unreserved statement

of compliance

Selection and application of Accounting policies (IAS 8),

presenting information to provide relevant, reliable, comparable and understandable information and

Additional Information

Inappropriate Accounting

Policies

Fair presentation and compliance with IFRS

•Management conclusion about fair presentation•Compliance with IFRS, except departure from particular requirement to achieve fair presentation•Title of departed IFRS, nature of departure, treatment IFRS requires, reason why treatment would mislead•Financial effect of the departure on each item

Departure from IFRS – Extreme Circumstances'

(Disclosure)

Departure from requirement of IFRS in prior

period

Departure from IFRS but regulatory

framework prohibits departure

Going Concern

Assessment of entity’s ability by

management

GCB unless

contrary intention

or no realistic

alternative to

liquidation

Disclosure of Uncertainties

Disclosure when financial statements are not on going concern

basis

Accrual Basis of Accounting

An entity shall prepare its financial statements, except

for cash flow information using the accrual basis of

accounting.

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.

Offsetting

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 event

Detracts 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.

Frequency of reporting

At least annually

In case change in end of reporting period

and presents financial statement for period

longer or shorter than one year – disclosure

Comparative InformationFor all amounts reported

in current period’s financial statements except when IFRSs

permit or require otherwise

When the entity changes the presentation or

classification of items – Reclassification of

comparative amounts – Disclosure:

When impracticable to reclassify comparative

amounts, an entity shall disclose:

Consistency of presentation

•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 or•An IFRS requires a change in presentation

An entity shall retain the

presentation and

classification of items in financial

statements from on period to the

next unless:

Structure and content

Introduction

Identification of the financial

statements

Statement of financial position

Statement of comprehensiv

e income

Statement of changes in

equity

Statement of cash flows

Notes Other disclosures

Identification of the financial statements

•the financial statements and distinguish them from other information in the same published document•each financial statement and the notes.

An entity shall

clearly identify

•The name of reporting entity or other means of identification, and changes in that information from the end of the preceding reporting period•Whether the financial statements are of an individual entity or a group of entities•The date of the end of the reporting period or the period covered by the set of financial statements or notes•The presentation currency, as defined in IAS 21; and•The level of rounding used in presenting amounts in the financial statements.

Display of information

prominently, and repeat it when

necessary for the information

presented to be understandable:

Statement of financial position

Information to be presented in the

statement of financial position

Current / non current

distinction

Current assets

Current liabilities

Information to be presented either in the statement of financial

position or in the notes

Information to be presented in the statement of financial position

Property, plant and

equipment

Investment property

Intangible assets

Financial asses

Investments accounted for

using the equity method

Biological assets

Trade and other

receivables

Cash and cash

equivalents

Non current assets held for sale and

discontinued operations

Trade and other

payables

Provisions

Financial liabilities

Liabilities and assets for current tax as defined in

IAS 12

Deferred tax liabilities and

deferred tax assets as defined in IAS 12

Liabilities included in disposal group classified as held

for sale

Non controlling interests,

presented within equity; and

Issued capital and reserves attributable

to owners of the parent

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 entity

Deferred tax assets (liabilities) not to be classified as current

assets (liabilities)

Current / non current distinction

•when a presentation based on liquidity provides information that is reliable and more relevant.•When exception applies, in order of liquidity.

Presentation of financial position by

classification in current and non current assets,

and current and non-current liabilities

except:

•No more than twelve months after the reporting period, and •More than twelve months after the reporting period

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:

Current assets

Current liabilities

Specific Discussion (Para 70-76)

Trade payables, accrual for employees and other operating costs – Normal operating cycle

Other 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 period

Discretion of entity to refinance / roll over obligation

Breach of provision of long term loan arrangement

Events after the Reporting Period (IAS 1)

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 capital

Description of the nature and purpose of each reserve within equity

Statement of comprehensive income

• Information to be presented in the statement of comprehensive income

• Profit or loss for the period• Other comprehensive income for the period• Information to be presented in the statement of

comprehensive income or in notes

Analysis of Expenses

• ‘Nature of expenses’ method• ‘Function of expenses’ method

Statement of Changes in equity

• Total comprehensive income for the period• Effect of retrospective application or

retrospective restatement (IAS 8)• Reconciliation between the carrying

amount at the beginning and the end of the period

• Dividend distributed per share

Statement of cash flows – IAS 7

Notes

• Structure• Disclosure of Accounting Policies• Sources of estimation uncertainty • Capital• Other disclosures

Notes - Structure

• Basis of preparation of the financial statements and the specific accounting policies

• Information required by IFRSs that is not presented elsewhere in the financial statements

• Information relevant to an understanding of financial statements

• Systemic manner, cross reference

Notes: Disclosure of Accounting Policies

• Measurement basis used in preparing the financial statements

• Other accounting policies used that are relevant to an understanding of FS

• Judgments that management has made in the process of applying the entity’s accounting policies

Notes: Sources of estimation uncertainty

• Information about the assumption• Major sources of estimation uncertainty

Capital

An entity shall disclose information that enables users of its financial statements to evaluate the entity’s objectives, policies and processes for managing capital

Notes: Other disclosures

• An entity shall disclose in the notes:– Dividend proposed or declared – Amount of any cumulative preference dividends

not recognized

• Domicile and legal form of the entity, its country of incorporation and the address of its registered office

• Description of nature of the entity’s operations and its principal activities

• Name of the parent and the ultimate parent of the group