IAS 1
Presentation of Financial Statements
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This Standard prescribes the basis for presentation of general purpose financial statements to ensure comparability both with the entity’s financial statements of previous periods and with the financial statements of other entities. It sets out overall requirements for the presentation of financial statements, guidelines for their structure and minimum requirements for their content. [IAS 1.1]
IAS 1 applies to all general purpose financial statements that are prepared and presented in accordance with International Financial Reporting Standards (IFRSs). [IAS 1.2]
General purpose financial statements are those intended to serve users who are not in a position to require financial reports tailored to their particular information needs. [IAS 1.7]
Financial statements are required to be presented fairly as set out in the framework and in accordance with IFRS and are required to comply with all requirements of IFRSs.
The financial statements must “present fairly” the financial position, financial performance, and cash flows of an entity. Fair presentation requires the faithful representation of the effects of transactions, other events, and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income, and expenses set out in the Framework. The application of IFRSs, with additional disclosure when necessary, is presumed to result in financial statements that achieve a fair presentation. [IAS 1.15]
IAS 1 requires an entity whose financial statements comply with IFRSs to make an explicit and unreserved statement of such compliance in the notes. Financial statements cannot be described as complying with IFRSs unless they comply with all the requirements of IFRSs (which include International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations). [IAS 1.16]
Inappropriate accounting policies are not rectified either by disclosure of the accounting policies used or by notes or explanatory material. [IAS 1.18]
IAS 1 acknowledges that, in extremely rare circumstances, management may conclude that compliance with an IFRS requirement would be so misleading that it would conflict with the objective of financial statements set out in the Framework. In such a case, the entity is required to depart from the IFRS requirement, with detailed disclosure of the nature, reasons, and impact of the departure. [IAS 1.19-21]
Financial statements are required to be prepared on a going concern basis (unless entity is in liquidation or has ceased trading or there is an indication that the entity is not a going concern).
The Conceptual Framework notes that financial statements are normally prepared assuming the entity is a going concern and will continue in operation for the foreseeable future. [Conceptual Framework, paragraph 4.1]
IAS 1 requires management to make an assessment of an entity’s ability to continue as a going concern. If management has significant concerns about the entity’s ability to continue as a going concern, the uncertainties must be disclosed. If management concludes that the entity is not a going concern, the financial statements should not be prepared on a going concern basis, in which case IAS 1 requires a series of disclosures. [IAS 1.25]
Accrual Basis of Accounting
IAS 1 requires that an entity prepare its financial statements, except for cash flow information, using the accrual basis of accounting. [IAS 1.27]
An entity is required to retain presentation and classification from one period to the next.
The presentation and classification of items in the financial statements shall be retained from one period to the next unless a change is justified either by a change in circumstances or a requirement of a new IFRS. [IAS 1.45]
Each material class of similar assets and items of dissimilar nature or function is to be presented separately.
Information is material if omitting, misstating, or obscuring it could reasonably be expected to influence decisions that the primary users of general-purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity. [IAS 1.7]*
Each material class of similar items must be presented separately in the financial statements. Dissimilar items may be aggregated only if they are individually immaterial. [IAS 1.29]
However, information should not be obscured by aggregating or by providing immaterial information, materiality considerations apply to the all parts of the financial statements, and even when a standard requires a specific disclosure, materiality considerations do apply. [IAS 1.30A-31]
* Clarified by Definition of Material (Amendments to IAS 1 and IAS 8), effective 1 January 2020.
Assets and liabilities, and income and expenses, may not be offset unless required or permitted by an IFRS. [IAS 1.32]
At least 1 year of comparative information (unless impractical).
IAS 1 requires that comparative information to be disclosed in 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 provided for narrative and descriptive where it is relevant to understanding the financial statements of the current period. [IAS 1.38]
-Statement of financial position is required to be presented if the entity retrospectively applies an accounting policy, restates items, or reclassifies items, and those adjustments had a material effect on the information in the statement of financial position at the beginning of the comparative period. [IAS 1.40A]
Where comparative amounts are changed or reclassified, various disclosures are required. [IAS 1.41]
A complete set of financial statements comprises:
- Statement of financial position as at the end of the period
- Statement of profit or loss and other comprehensive income for the period
- Statement of changes in equity for the period
- Statement of cash flows for the period
- Notes, comprising material accounting policy information and other explanatory information;
- comparative information prescribed by the standard.
All financial statements are required to be presented with equal prominence. [IAS 1.10]
When an entity applies an accounting policy retrospectively or makes a retrospective restatement of items in its financial statements, or when it reclassifies items in its financial statements, it must also present a statement of financial position (balance sheet) as at the beginning of the earliest comparative period.
Reports that are presented outside of the financial statements – including financial reviews by management, environmental reports, and value added statements – are outside the scope of IFRSs. [IAS 1.14]
An entity may use titles for the statements other than those used in this Standard. For example, an entity may use the title ‘statement of comprehensive income’ instead of ‘statement of profit or loss and other comprehensive income’.
IAS 1 requires an entity to clearly identify: [IAS 1.49-51]
- The financial statements, which must be distinguished from other information in a published document
- Each financial statement and the notes to the financial statements.
In addition, the following information must be displayed prominently, and repeated as necessary: [IAS 1.51]
- The name of the reporting entity and any change in the name
- whether the financial statements are a group of entities or an individual entity
- information about the reporting period
- the presentation currency (as defined by IAS 21 The Effects of Changes in Foreign Exchange Rates)
- The level of rounding used (e.g. thousands, millions).
- Financial statements will be prepared at least annually.
- If the annual reporting period changes and financial statements are prepared for a different period, the entity must disclose the reason for the change and state that the amounts are not entirely comparable. [IAS 1.36]
- Present current and non-current items separately; or
- Present items in order of liquidity.
Whichever method of presentation is adopted, an entity shall disclose the 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:
(a) no more than twelve months after the reporting period, and
(b) more than twelve months after the reporting period.
| Current assets | Current Liabilites |
|---|---|
| Expected to be realised in the entity’s normal operating cycle | Expected to be realised in the entity’s normal operating cycle |
| Held primarily for the purpose of trading | Held primarily for the purpose of trading |
| Expected to be realised within 12 months after the reporting Period. | Due to be settled within 12 months |
| Cash and Cash Equivalents | For which the entity does not have the right at the end of the reporting period to defer settlement beyond 12 months. |
| All other assets are non-current. | All other liabilities are Non-Current. |
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 debt is classified as non-current, even if the liability would otherwise be due within 12 months. [IAS 1.73]
If a liability has become payable on demand because an entity has breached an undertaking under a long-term loan agreement on or before the reporting date, the liability is current, even if the lender has agreed, after the reporting date and before the authorisation of the financial statements for issue, not to demand payment as a consequence of the breach. [IAS 1.74] However, the liability is classified as non-current if the 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 the entity can rectify the breach and during which the lender cannot demand immediate repayment. [IAS 1.75]
Settlement by the issue of equity instruments does not impact classification. [IAS 1.76B]
| Line Items |
|---|
| The line items to be included on the face of the statement of financial position are: [IAS 1.54]
(a) property, plant and equipment |
Additional line items, headings and subtotals may be needed to fairly present the entity’s financial position. [IAS 1.55]
|
Further sub-classifications of line items presented are made in the statement or in the notes, for example: [IAS 1.77-78]:
|
| Format of Statement |
|---|
| IAS 1 does not prescribe the format of the statement of financial position. Assets can be presented current then non-current, or vice versa, and liabilities and equity can be presented current then non-current then equity, or vice versa. A net asset presentation (assets minus liabilities) is allowed. |
| Share Capital and Reserves |
|---|
Regarding issued share capital and reserves, the following disclosures are required: [IAS 1.79]
Additional disclosures are required in respect of entities without share capital and where an entity has reclassified puttable financial instruments. [IAS 1.80-80A] |
- Present current and non-current items separately; or
- Present items in order of liquidity.
Whichever method of presentation is adopted, an entity shall disclose the 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:
(a) no more than twelve months after the reporting period, and
(b) more than twelve months after the reporting period.
| Current assets | Current Liabilites |
|---|---|
| Expected to be realised in the entity’s normal operating cycle | Expected to be realised in the entity’s normal operating cycle |
| Held primarily for the purpose of trading | Held primarily for the purpose of trading |
| Expected to be realised within 12 months after the reporting Period. | Due to be settled within 12 months |
| Cash and Cash Equivalents | For which the entity does not have the right at the end of the reporting period to defer settlement beyond 12 months. |
| All other assets are non-current. | All other liabilities are Non-Current. |
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 debt is classified as non-current, even if the liability would otherwise be due within 12 months. [IAS 1.73]
If a liability has become payable on demand because an entity has breached an undertaking under a long-term loan agreement on or before the reporting date, the liability is current, even if the lender has agreed, after the reporting date and before the authorisation of the financial statements for issue, not to demand payment as a consequence of the breach. [IAS 1.74] However, the liability is classified as non-current if the 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 the entity can rectify the breach and during which the lender cannot demand immediate repayment. [IAS 1.75]
Settlement by the issue of equity instruments does not impact classification. [IAS 1.76B]
| Line Items |
|---|
| The line items to be included on the face of the statement of financial position are: [IAS 1.54]
(a) property, plant and equipment |
Additional line items, headings and subtotals may be needed to fairly present the entity’s financial position. [IAS 1.55]
|
Further sub-classifications of line items presented are made in the statement or in the notes, for example: [IAS 1.77-78]:
|
| Format of Statement |
|---|
| IAS 1 does not prescribe the format of the statement of financial position. Assets can be presented current then non-current, or vice versa, and liabilities and equity can be presented current then non-current then equity, or vice versa. A net asset presentation (assets minus liabilities) is allowed. |
| Share Capital and Reserves |
|---|
Regarding issued share capital and reserves, the following disclosures are required: [IAS 1.79]
Additional disclosures are required in respect of entities without share capital and where an entity has reclassified puttable financial instruments. [IAS 1.80-80A] |
- Present current and non-current items separately; or
- Present items in order of liquidity.
Whichever method of presentation is adopted, an entity shall disclose the 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:
(a) no more than twelve months after the reporting period, and
(b) more than twelve months after the reporting period.
| Current assets | Current Liabilites |
|---|---|
| Expected to be realised in the entity’s normal operating cycle | Expected to be realised in the entity’s normal operating cycle |
| Held primarily for the purpose of trading | Held primarily for the purpose of trading |
| Expected to be realised within 12 months after the reporting Period. | Due to be settled within 12 months |
| Cash and Cash Equivalents | For which the entity does not have the right at the end of the reporting period to defer settlement beyond 12 months. |
| All other assets are non-current. | All other liabilities are Non-Current. |
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 debt is classified as non-current, even if the liability would otherwise be due within 12 months. [IAS 1.73]
If a liability has become payable on demand because an entity has breached an undertaking under a long-term loan agreement on or before the reporting date, the liability is current, even if the lender has agreed, after the reporting date and before the authorisation of the financial statements for issue, not to demand payment as a consequence of the breach. [IAS 1.74] However, the liability is classified as non-current if the 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 the entity can rectify the breach and during which the lender cannot demand immediate repayment. [IAS 1.75]
Settlement by the issue of equity instruments does not impact classification. [IAS 1.76B]
| Line Items |
|---|
| The line items to be included on the face of the statement of financial position are: [IAS 1.54]
(a) property, plant and equipment |
Additional line items, headings and subtotals may be needed to fairly present the entity’s financial position. [IAS 1.55]
|
Further sub-classifications of line items presented are made in the statement or in the notes, for example: [IAS 1.77-78]:
|
| Format of Statement |
|---|
| IAS 1 does not prescribe the format of the statement of financial position. Assets can be presented current then non-current, or vice versa, and liabilities and equity can be presented current then non-current then equity, or vice versa. A net asset presentation (assets minus liabilities) is allowed. |
| Share Capital and Reserves |
|---|
Regarding issued share capital and reserves, the following disclosures are required: [IAS 1.79]
Additional disclosures are required in respect of entities without share capital and where an entity has reclassified puttable financial instruments. [IAS 1.80-80A] |
- Present current and non-current items separately; or
- Present items in order of liquidity.
Whichever method of presentation is adopted, an entity shall disclose the 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:
(a) no more than twelve months after the reporting period, and
(b) more than twelve months after the reporting period.
| Current assets | Current Liabilites |
|---|---|
| Expected to be realised in the entity’s normal operating cycle | Expected to be realised in the entity’s normal operating cycle |
| Held primarily for the purpose of trading | Held primarily for the purpose of trading |
| Expected to be realised within 12 months after the reporting Period. | Due to be settled within 12 months |
| Cash and Cash Equivalents | For which the entity does not have the right at the end of the reporting period to defer settlement beyond 12 months. |
| All other assets are non-current. | All other liabilities are Non-Current. |
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 debt is classified as non-current, even if the liability would otherwise be due within 12 months. [IAS 1.73]
If a liability has become payable on demand because an entity has breached an undertaking under a long-term loan agreement on or before the reporting date, the liability is current, even if the lender has agreed, after the reporting date and before the authorisation of the financial statements for issue, not to demand payment as a consequence of the breach. [IAS 1.74] However, the liability is classified as non-current if the 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 the entity can rectify the breach and during which the lender cannot demand immediate repayment. [IAS 1.75]
Settlement by the issue of equity instruments does not impact classification. [IAS 1.76B]
| Line Items |
|---|
| The line items to be included on the face of the statement of financial position are: [IAS 1.54]
(a) property, plant and equipment |
Additional line items, headings and subtotals may be needed to fairly present the entity’s financial position. [IAS 1.55]
|
Further sub-classifications of line items presented are made in the statement or in the notes, for example: [IAS 1.77-78]:
|
| Format of Statement |
|---|
| IAS 1 does not prescribe the format of the statement of financial position. Assets can be presented current then non-current, or vice versa, and liabilities and equity can be presented current then non-current then equity, or vice versa. A net asset presentation (assets minus liabilities) is allowed. |
| Share Capital and Reserves |
|---|
Regarding issued share capital and reserves, the following disclosures are required: [IAS 1.79]
Additional disclosures are required in respect of entities without share capital and where an entity has reclassified puttable financial instruments. [IAS 1.80-80A] |
- Present current and non-current items separately; or
- Present items in order of liquidity.
Whichever method of presentation is adopted, an entity shall disclose the 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:
(a) no more than twelve months after the reporting period, and
(b) more than twelve months after the reporting period.
| Current assets | Current Liabilites |
|---|---|
| Expected to be realised in the entity’s normal operating cycle | Expected to be realised in the entity’s normal operating cycle |
| Held primarily for the purpose of trading | Held primarily for the purpose of trading |
| Expected to be realised within 12 months after the reporting Period. | Due to be settled within 12 months |
| Cash and Cash Equivalents | For which the entity does not have the right at the end of the reporting period to defer settlement beyond 12 months. |
| All other assets are non-current. | All other liabilities are Non-Current. |
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 debt is classified as non-current, even if the liability would otherwise be due within 12 months. [IAS 1.73]
If a liability has become payable on demand because an entity has breached an undertaking under a long-term loan agreement on or before the reporting date, the liability is current, even if the lender has agreed, after the reporting date and before the authorisation of the financial statements for issue, not to demand payment as a consequence of the breach. [IAS 1.74] However, the liability is classified as non-current if the 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 the entity can rectify the breach and during which the lender cannot demand immediate repayment. [IAS 1.75]
Settlement by the issue of equity instruments does not impact classification. [IAS 1.76B]
| Line Items |
|---|
| The line items to be included on the face of the statement of financial position are: [IAS 1.54]
(a) property, plant and equipment |
Additional line items, headings and subtotals may be needed to fairly present the entity’s financial position. [IAS 1.55]
|
Further sub-classifications of line items presented are made in the statement or in the notes, for example: [IAS 1.77-78]:
|
| Format of Statement |
|---|
| IAS 1 does not prescribe the format of the statement of financial position. Assets can be presented current then non-current, or vice versa, and liabilities and equity can be presented current then non-current then equity, or vice versa. A net asset presentation (assets minus liabilities) is allowed. |
| Share Capital and Reserves |
|---|
Regarding issued share capital and reserves, the following disclosures are required: [IAS 1.79]
Additional disclosures are required in respect of entities without share capital and where an entity has reclassified puttable financial instruments. [IAS 1.80-80A] |
