Class Notes

ADDITIONAL NOTES IAS 1

INTRODUCTION
SCOPE AND DEFINITION
IAS 1 provides guidance on preparing and presenting general purpose FS | 19
IAS 1
under IFRSs.
(referred to as ‘FS’) are those intended to meet the needs of users who are
General
not in a position to require an entity to prepare reports tailored to their
purpose FS
particular information needs.
GENERAL FEATURES
Fair The application of IFRSs, with additional disclosure when necessary, is
presentation presumed to result in FS that achieve a fair presentation.
Except when IFRSs permit or require otherwise, an entity shall disclose
comparative information in respect of the previous period for all amounts
Comparative
reported in the current period’s financial statements. An entity shall include
information
comparative information for narrative and descriptive information when it is
relevant to an understanding of the current period’s financial statements.

IAS 1: STRUCTURE AND CONTENT

IDENTIFICATION
An entity shall clearly identify the financial statements and distinguish them
Distinguish
from other information in the same published document.
An entity shall clearly identify each financial statement and the notes. In
addition, an entity shall display the following information prominently, and
repeat it when necessary for the information presented to be
understandable:
(a) the name of the reporting entity or other means of identification, and
any change in that information from the end of the preceding
reporting period;
Other
(b) whether the financial statements are of an individual entity or a
group of entities;
(c) the date of the end of the reporting period or the period covered by
the set of financial statements or notes;
(d) the presentation currency, as defined in IAS 21; and
(e) the level of rounding used in presenting amounts in the financial
statements.
STATEMENT OF FINANCIAL POSITION
See formats below. IAS 1 does not prescribe the order or format in which an
Minimum entity presents items. It simply lists items that are sufficiently different in
line items nature or function to warrant separate presentation in the statement of
financial position.
An entity shall present additional line items, headings and subtotals in the
Additional statement of financial position when such presentation is relevant to an
understanding of the entity’s financial position.

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ICMAP M4 Financial Accounting

An entity shall classify an asset as current when:

(a) it expects to realise the asset, or intends to sell or consume it, in its
normal operating cycle;
(b) it holds the asset primarily for the purpose of trading;
Current and (c) it expects to realise the asset within twelve months after the reporting
non-current period; or
20| assets (d) the asset is cash or a cash equivalent (as defined in IAS 7) unless the
asset is restricted from being exchanged or used to settle a liability for
at least twelve months after the reporting period.
An entity shall classify all other assets as non-current.
An entity shall classify a liability as current when:
(a) it expects to settle the liability in its normal operating cycle;
(b) it holds the liability primarily for the purpose of trading;
(c) the liability is due to be settled within twelve months after the reporting
Current and period; or
non-current (d) it does not have an unconditional right to defer settlement of the
liabilities liability for at least twelve months after the reporting period. Terms of
a liability that could, at the option of the counterparty, result in its
settlement by the issue of equity instruments do not affect its
classification.
An entity shall classify all other liabilities as non-current.
In the
An entity shall disclose, either in the statement of financial position or in the
statement
notes, further sub classifications of the line items presented, classified in a
or in the
manner appropriate to the entity’s operations.
notes
STATEMENT OF COMPREHENSIVE INCOME
An entity shall present all items of income and expense recognised in a
period:
(a) in a single statement of comprehensive income, or
Presentation (b) in two statements: a statement displaying components of profit or
loss (separate income statement) and a second statement
beginning with profit or loss and displaying components of other
comprehensive income (statement of comprehensive income).
As a minimum, the statement of comprehensive income shall include line
items that present the following amounts for the period:
(a) revenue;
(b) tax expense;
Information to (c) profit or loss;
be presented (d) each component of other comprehensive income classified by
in the nature;
statement of (e) total comprehensive income.
comprehensive
income An entity includes additional line items in the statement of comprehensive
income and in the separate income statement (if presented), and it
amends the descriptions used and the ordering of items when this is
necessary to explain the elements of financial performance. An entity
considers factors including materiality and the nature and function of the
items of income and expense.
An entity shall recognise all items of income and expense in a period in
Profit or loss
profit or loss unless an IFRS requires or permits otherwise.
An entity shall disclose the amount of income tax relating to each
Other
component of other comprehensive income, including reclassification
comprehensive
adjustments, either in the statement of comprehensive income or in the
income
notes.

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Class Notes

When items of income or expense are material, an entity shall disclose

their nature and amount separately.

Circumstances that would give rise to the separate disclosure of items of

income and expense include:
(a) write-downs of inventories to net realisable value or of property,
plant and equipment to recoverable amount, as well as reversals | 21
of such write-downs;
(b) restructurings of the activities of an entity and reversals of any
Either in the
provisions for the costs of restructuring;
statement or in
(c) disposals of items of property, plant and equipment;
the notes
(d) disposals of investments;
(e) discontinued operations;
(f) litigation settlements; and
(g) other reversals of provisions.

An entity shall present an analysis of expenses recognised in profit or

loss using a classification based on either their nature or their function
within the entity, whichever provides information that is reliable and more
relevant.
Revenue X
Other income X
Changes in inventories of finished goods & WIP X
Nature of Raw materials and consumables used X
expense Employee benefits expense X
method Depreciation and amortisation expense X
Other expenses X
Total expenses (X)
Profit before tax X
.

Revenue X
Cost of sales (X)
Gross profit X
Other income X
Function of Distribution costs (X)
expense Administrative expenses (X)
method Other expenses (X)
Profit before tax X
An entity classifying expenses by function shall disclose additional
information on the nature of expenses, including depreciation and
amortisation expense and employee benefits expense.

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