what is ias 1 presentation of financial statements

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Presentation of Financial Statements (IAS 1)

Last updated: 14 November 2023

IAS 1 serves as the main standard that outlines the general requirements for presenting financial statements. It is applicable to ‘general purpose financial statements’, which are designed to meet the informational needs of users who cannot demand customised reports from an entity. Documents like management commentary or sustainability reports, which are often included in annual reports, fall outside the scope of IFRS, as indicated in IAS 1.13-14. Similarly, financial statements submitted to a court registry are not considered general purpose financial statements (see IAS 1.BC11-13).

The standard primarily focuses on annual financial statements, but its guidelines in IAS 1.15-35 also extend to interim financial reports (IAS 1.4). These guidelines address key elements such as fair presentation, compliance with IFRS, the going concern principle, the accrual basis of accounting, offsetting, materiality, and aggregation. For comprehensive guidance on interim reporting, please refer to IAS 34 .

Note that IAS 1 will be superseded by the upcoming IFRS 18 Presentation and Disclosure in Financial Statements .

Now, let’s explore the general requirements for presenting financial statements in greater detail.

Financial statements

Components of a complete set of financial statements.

Paragraph IAS 1.10 outlines the elements that make up a complete set of financial statements. Companies have the flexibility to use different titles for these documents, but each statement must be presented with equal prominence (IAS 1.11). The terminology used in IAS 1 is tailored for profit-oriented entities. However, not-for-profit organisations or entities without equity (as defined in IAS 32), may use alternative terminology for specific items in their financial statements (IAS 1.5-6).

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Compliance with IFRS

Financial statements must include an explicit and unreserved statement of compliance with IFRS in the accompanying notes. This statement is only valid if the entity adheres to all the requirements of every IFRS standard (IAS 1.16). In many jurisdictions, such as the European Union, laws mandate compliance with a locally adopted version of IFRS.

IAS 1 does consider extremely rare situations where an entity might diverge from a specific IFRS requirement. Such a departure is permissible only if it prevents the presentation of misleading information that would conflict with the objectives of general-purpose financial reporting (IAS 1.20-22). Alternatively, entities can disclose the impact of such a departure in the notes, explaining how the statements would appear if the exception were made (IAS 1.23).

Identification of financial statements

The guidelines for identifying financial statements outlined in IAS 1.49-53 are straightforward and rarely cause issues in practice.

Going concern

The ‘going concern’ principle is a cornerstone of IFRS and other major GAAP. It assumes that an entity will continue to operate for the foreseeable future (at least 12 months). IAS 1 mandates management to assess whether the entity is a ‘going concern’. Should there be any material uncertainties regarding the entity’s future, these must be disclosed (IAS 1.25-26). IFRSs do not provide specific accounting principles for entities that are not going concerns, other than requiring disclosure of the accounting policies used. One of the possible approaches is to measure all assets and liabilities using their liquidation value.

See also this educational material at IFRS.org.

Materiality and aggregation

IAS 1.29-31 emphasise the importance of materiality in preparing user-friendly financial statements. While IFRS mandates numerous disclosures, entities should only include information that is material. This concept should be at the forefront when preparing financial statements, as reminders about materiality are seldom provided in other IFRS standards or publications.

Generally, entities should not offset assets against liabilities or income against expenses unless a specific IFRS standard allows or requires it. IAS 1.32-35 offer guidance on what can and cannot be offset. Offsetting of financial instruments is discussed further in IAS 32 .

Frequency of reporting

Entities are required to present a complete set of financial statements at least annually (IAS 1.36). However, some Public Interest Entities (PIEs) may be obliged to release financial statements more frequently, depending on local regulations. However, these are typically interim financial statements compiled under IAS 34 .

IAS 1 also allows for a 52-week reporting period instead of a calendar year (IAS 1.37). This excerpt from Tesco’s annual report serves to demonstrate this point, showing that the group uses 52-week periods for their financial year, even when some subsidiaries operate on a calendar-year basis:

Disclosure on 52-week financial year provided by Tesco plc

If an entity changes its reporting period, it must clearly disclose this modification and provide the rationale for the change (IAS 1.36). It is advisable to include an explanatory note with comparative data that aligns with the new reporting period for clarity.

Comparative information

As a general guideline, entities should present comparative data for the prior period alongside all amounts reported for the current period, even when specific guidelines in a given IFRS do not require it. However, there’s no obligation to include narrative or descriptive information about the preceding period if it isn’t pertinent for understanding the current period (IAS 1.38).

If an entity opts to provide comparative data for more than the immediately preceding period, this additional information can be included in selected primary financial statements only. However, these additional comparative periods should also be detailed in the relevant accompanying notes (IAS 1.38C-38D).

IAS 1.40A-46 outlines how to present the statement of financial position when there are changes in accounting policies, retrospective restatements, or reclassifications. This entails producing a ‘third balance sheet’ at the start of the preceding period (which may differ from the earliest comparative period, if more than one is presented). Key points to note are:

The third balance sheet is required only if there’s a material impact on the opening balance of the preceding period (IAS 1.40A(b)).
If a third balance sheet is included, there’s no requirement to add a corresponding third column in the notes, although this could be useful where numbers have been altered by the change (IAS 1.40C).
Interim financial statements do not require a third balance sheet (IAS 1.BC33).

IAS 8 also requires comprehensive disclosures concerning changes in accounting policies and corrections of errors .

Statement of financial position

IAS 1.54 enumerates the line items that must, at a minimum, appear in the statement of financial position. Entities should note that separate lines are not required for immaterial items (IAS 1.31). Additional line items can be added for entity-specific or industry-specific matters. IAS 1 permits the inclusion of subtotals, provided the criteria set out in IAS 1.55A are met.

Additional disclosure requirements are set out in IAS 1.77-80A. Of particular interest are the requirements pertaining to equity (IAS 1.79), which begin with the number of shares and extend to include details such as ‘rights, preferences, and restrictions relating to share capital, including restrictions on the distribution of dividends and the repayment of capital.’ While these kinds of limitations are common across various legal jurisdictions (for example, not all retained earnings can be distributed as dividends), many companies neglect to disclose such limitations in their financial statements.

For guidance on classifying assets and liabilities as either current or non-current, please refer to the separate page dedicated to this topic.

Statement of profit or loss and other comprehensive income

IAS 1 provides two methods for presenting profit or loss (P/L) and other comprehensive income (OCI). Entities can either combine both P/L and OCI into a single statement or present them in separate statements (IAS 1.81A-B). Additionally, the P/L and total comprehensive income for a given period should be allocated between the owners of the parent company and non-controlling interests (IAS 1.81B).

Minimum contents in P/L and OCI

IAS 1.82-82A specifies the minimum items that must appear in the P/L and OCI statements. These items are required only if they materially impact the financial statements (IAS 1.31).

Entities are permitted to add subtotals to the P/L statement if they meet the criteria specified in IAS 1.85A. Operating income is often the most commonly used subtotal in P/L. This practice may be attributed to the 1997 version of IAS 1, which mandated the inclusion of this subtotal—although this is no longer the case. IAS 1.BC56 clarifies that an operating profit subtotal should not exclude items commonly considered operational, such as inventory write-downs, restructuring costs, or depreciation/amortisation expenses.

Profit or loss (P/L)

All items of income and expense must be recognised in P/L (or OCI). This means that no income or expenses should be recognised directly in the statement of changes in equity, unless another IFRS specifically mandates it (IAS 1.88). Direct recognition in equity may also result from intra-group transactions . IAS 1.97-98 require separate disclosure of material items of income and expense, either directly in the income statement or in the notes.

Expenses in P/L can be presented in one of two ways (IAS 1.99-105):

By their nature (e.g., depreciation, employee benefits); or
By their function within the entity (e.g., cost of sales, distribution costs, administrative expenses).

When opting for the latter, entities must provide additional details on the nature of the expenses in the accompanying notes (IAS 1.104).

Other comprehensive income (OCI)

OCI encompasses income and expenses that other IFRS specifically exclude from P/L. There is no conceptual basis for deciding which items should appear in OCI rather than in P/L. Most companies present P/L and OCI as separate statements, partly because OCI is generally overlooked by investors and those outside of accounting and financial reporting circles. The concern is that combining the two could reduce net profit to merely a subtotal within total comprehensive income.

All elements that constitute OCI are specifically outlined in IAS 1.7, as part of its definitions.

Reclassification adjustments

A reclassification adjustment refers to the amount reclassified to P/L in the current period that was recognised in OCI in the current or previous periods (IAS 1.7). All items in OCI must be grouped into one of two categories: those that will or will not be subsequently reclassified to P/L (IAS 1.82A). Reclassification adjustments must be disclosed either within the OCI statement or in the accompanying notes (IAS 1.92-96).

To illustrate, foreign exchange differences arising on translation of foreign operations and gains or losses from certain cash flow hedges are examples of items that will be reclassified to P/L. In contrast, remeasurement gains and losses on defined benefit employee plans or revaluation gains on properties will not be reclassified to P/L.

The practice of transferring items from OCI to P/L, commonly known as ‘recycling’, lacks a concrete conceptual basis and the criteria for allowing such transfers in IFRS are often considered arbitrary.

Tax effects

OCI items can be presented either net of tax effects or before tax, with the overall tax impact disclosed separately. In either case, entities must specify the tax amount related to each item in OCI, including any reclassification adjustments (IAS 1.90-91). Interestingly, there is no such requirement to disclose tax effects for individual items in the income statement.

Statement of changes in equity

IAS 1.106 outlines the minimum line items that must be included in the statement of changes in equity. Subsequent paragraphs specify the disclosure requirements, which can be addressed either within the statement itself or in the accompanying notes. It’s crucial to note that changes in equity during a reporting period can arise either from income and expense items or from transactions involving owners acting in their capacity as owners (IAS 1.109). This means that entities cannot adjust equity directly based on changes in assets or liabilities unless these adjustments result from transactions with owners, such as capital contributions or dividend payments, or are otherwise mandated by other IFRSs.

Statement of cash flows

The statement of cash flows is governed by IAS 7 .

Explanatory notes

Structure of explanatory notes

The structure for explanatory notes is detailed in IAS 1.112-116. In practice, there are several commonly adopted approaches to organising these notes:

Approach #1:

Primary financial statements (P/L, OCI, etc.)
Statement of compliance and basis of preparation
Accounting policies

Approach #1 is logically coherent, as understanding accounting policies is crucial before delving into the financial data. However, in reality, few people read the accounting policies in their entirety. Consequently, users often have to navigate past several pages of accounting policies to reach the explanatory notes.

Approach #2:

Primary financial statements (P/L, OCI, etc)

In Approach #2, accounting policies are treated as an appendix and positioned at the end of the financial statements. The advantage here is that all numerical data is clustered together, uninterrupted by extensive descriptions of accounting policies.

Approach #3:

Explanatory notes integrated with relevant accounting policies

Approach #3 pairs accounting policies directly with the associated explanatory notes. For example, accounting policies relating to inventory would appear alongside the explanatory note that breaks down inventory components.

Management of capital

IAS 1.134-136 outline the disclosures related to capital management. These provisions apply to all entities, whether or not they are subject to external capital requirements. An important note here is that entities are not obligated to disclose specific values or ratios concerning capital objectives or requirements.

IAS 1.137 mandates disclosure of dividends proposed or declared before the financial statements were authorised for issue but not recognised as a distribution to owners during the period. Furthermore, entities are required to disclose the amount of any cumulative preference dividends not recognised.

Disclosure of accounting policies

IAS 1 specifies the requirements for disclosing accounting policy information which are discussed here .

Disclosing judgements and sources of estimation uncertainty

IAS 1 mandates disclosing judgements and sources of estimation uncertainty .

Other disclosures

Additional miscellaneous disclosure requirements are detailed in paragraphs IAS 1.138.

IFRS 18 Presentation and Disclosure in Financial Statements

The upcoming IFRS 18 Presentation and Disclosure in Financial Statements , which will supersede IAS 1, aims to enhance the comparability and transparency of financial reporting, focusing on the statement of profit or loss. Key changes include:

The introduction of two new subtotals in the P/L statement: ‘operating profit’ and ‘profit before financing and income taxes’.
A requirement for the reconciliation of management-defined performance measures (also known as ‘non-GAAP’ measures) with those specified by IFRS.
Refined guidelines for the aggregation and disaggregation of information within the primary financial statements.
Limited changes to the statement of cash flows, establishing operating profit as a starting point for the indirect method and eliminating options for the classification of interest and dividend cash flows.

Learn more in this BDO’s publication .

The release of IFRS 18 is expected in Q2 2024. This new IFRS will be effective from 1 January 2027 with early application permitted.

The information provided on this website is for general information and educational purposes only and should not be used as a substitute for professional advice. Use at your own risk. Excerpts from IFRS Standards come from the Official Journal of the European Union (© European Union, https://eur-lex.europa.eu). You can access full versions of IFRS Standards at shop.ifrs.org. IFRScommunity.com is an independent website and it is not affiliated with, endorsed by, or in any other way associated with the IFRS Foundation. For official information concerning IFRS Standards, visit IFRS.org.

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IAS 1 Presentation of Financial Statements: Summary

IAS 1 Presentation of Financial Statements represents a basis of the whole IFRS reporting, as it sets overall requirements for the presentation of financial statements, guidelines for their structure and minimum requirements for their content.

Financial Statements

Purpose of the financial statements is to provide information about the financial position, financial performance and cash flows of an entity that is useful to a wide range of users in making economic decisions.

The complete set of financial statements compliant with IFRS comprises 5 elements:

a statement of financial position as at the end of the period
a statement of comprehensive income for the period
a statement of changes in equity for the period
a statement of cash flows for the period
notes containing a summary of significant accounting policies and other explanatory information.

If some accounting policy is applied retrospectively, or some retrospective restatements or reclassifications were made, then also a statement of financial position as at the beginning of the earliest comparative period shall be presented.

IAS 1 explains the general features of financial statements, such as fair presentation and compliance with IFRS , going concern, accrual basis of accounting, materiality and aggregation, offsetting, frequency of reporting, comparative information and consistency of presentation.

Structure and Content

IAS 1 requires identification of the financial statements and distinguishing them from other information in the same published document.

Every element of the financial statements shall contain the name of the reporting entity, the information whether the financial statements are of an individual or of a group, the date of the reporting entity and period covered, the presentation currency and the level of rounding (thousands, millions…).

IAS 1 lists the minimum content to be presented in the financial statements, except for the statement of cash flows (subject to IAS 7). So let’s look at it in a detail.

Statement of Financial Position

Before significant amendments of IAS 1, this statement was simply called “balance sheet”, however, it was renamed.

IAS 1 requires presentation of classified statement of financial position where current assets or liabilities are separated from non-current assets or liabilities. Basically, the asset or liability is current when it is expected to be recovered or settled within 12 months after the reporting period.

With regard to a minimum content, the following line items shall be presented:

Further subclassifications of the line items shall be disclosed either directly in the statement of financial position or in the notes, such as disaggregation of property, plant and equipment into classes, and similar. Also, certain information related to the share capital, reserves and a few others shall be included in the statement of financial position, the statement of changes in equity or in the notes.

IAS 1 does NOT prescribe the precise format of the statement of financial position. Instead, several formats are acceptable if they fulfill all requirements outlined above.

Statement of Comprehensive Income

The statement of comprehensive income has 2 basic elements:

Profit or loss for the period : here, all items of income and expenses must be recognized.
Other comprehensive income : items recognized directly to equity or reserves, such as changes in revaluation surplus, gains or losses from subsequent measurement of available-for-sale financial assets, etc.

As a minimum , the statement of comprehensive income must contain the following items:

As opposed to US GAAP , IAS 1 prohibits to report any transaction or item as extraordinary items.

Profit or loss for the period, as well as total comprehensive income shall be both presented in allocation:

attributable to non-controlling interests and
attributable to owners of the parent.

The entity might choose to classify expenses recognized in profit or loss for the period by their nature or by their function.

IAS 1 requires disclosure of certain items separately , either in the statement of comprehensive income, or in the notes. These items are as follows: write-downs of inventories and property, plant and equipment, their reversals, restructuring of activities and reversals of related provisions, disposals of property, plant and equipment, disposals of investments, discontinuing operations, litigation settlements and other reversals of provisions.

Statement of Changes in Equity

As a minimum , the statement of changes in equity must contain the following items:

total comprehensive income for the period, showing separately amounts attributable to owners of the parent and to non-controlling interests
the effect of retrospective application or restatement for each component of equity (if applicable)
those resulting from profit or loss
resulting from other comprehensive income
resulting from transactions with owners (contributions, distributions and changes in ownership)

Also, IAS 1 prescribes to present amount of dividends recognized as distributions and the related amount per share on the face of the statement of changes in equity or in the notes.

Notes to the Financial Statements

The notes are meant to be the document accompanying numerical financial statements listed above. They should provide additional information not contained in the numbers, the basis of preparation of the financial statements and some additional information that might be relevant.

IAS 1 sets that the notes shall contain a statement of compliance with IFRS , summary of significant accounting policies applied, supporting information for the numbers presented in the financial statements and other disclosures.

You can read more about the notes and how to write them in this article .

IAS 1 is shortly summarized in the following video:

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43 Comments

Thank you for simplifying this standard . It is very helpful in my study and revision . looking forward to the other standards

A speed point machine, is it an asset that needs to be recorded in a business if they are using it?

Dear Silvia, Are prudence and conservatism concepts still applicable now under the new Conceptual Framework?

Hi I want to know can we prepare multiyear financials (i.e. 2 years to show I comparatives) as per the international auditing standards

SILIVAIA I really apprentice the presentation please can i have the ppt.?

Hi Asmera, no sorry, we only provide pdf to our subscribed students of the IFRS Kit.

Hi i have case that we debit the account Other comprehensive income (Re-measurement losses / Gain on defined benefit liability) by amount 12 Million and credit two account one of them is end of service expenses ( P&L item) by 7 Million and other account is provision of end of service by 6 Million Dr/ Other comprehensive income 12 Million Cr/ End of service expense ( P&L Item). Cr/ Provision of end of service ( Balance sheet item). my question :- 1- Other comprehensive account will be appear in balance sheet and income statement 2- and if it must appear in income statement shall we put total balance of this account 12 Million or just put 6 Million which is came from PL and ignore the 7 Million which came from provision of end of service as it is balance sheet item

This video has made my understanding of IAS 1 more clearly and understandable.I can confidently say I`am ready for the test.

I didn’t see any explanatiins for Cash Flow statement. This is also an element of Financial Statement as whole. Or would that mean it is no longer considered as part the whole reported Financial Statement?

You did not see it because it is not covered by IAS 1 (and, you are reading the article about IAS 1). You should check out IAS 7 .

Hello Silvia, Can you please help me to know as to what is the objective of creating Other Comprehensive Income and how to decide what all items should go to Other comprehensive income and Profit or loss account ?

Hi Diksha, I think this article can give you the answer . S.

hello siliva, help me with tax expense computation when u have provision, some balance due

In my opinion the documents that you share through social media is more attractive and brief to understand. I would like to follow you! Please, would you like to share brief notes and explanation on IFRS 9. By focusing MFI in detail!

Til now, I don’t understand what is the main consideration, if any, the IASB classifies a transaction as profit or loss while another as other comprehensive income. Is there any theoretical foundation or something behind the existence of other comprehensive income items?

Dear Siklus, I think this article might help . S.

Dear Sylvia, if a Company made a decision to decrease share capital (due to accumulated loss that existed on December 31, 2016) on January 17, should this be treated as an adjusting event?

Thank you very much for your help!

It depends on when the decision was made. If after 31 Dec 2016, then no, it’s non-adjusting event. S.

amazing presentation of statement of financial position but other comprehensive income should elaborate clearly. Over all presentation was very good . I also learn from that.thank you very much

Very lucid explanations. Thanks

The presentation is very knowledgeable. Is it possible for you to mail me the ppt. It would be of great help.

Hi Silvia, is it required by the standard to present the subscribed share capital with the outstanding balance of subscription receivables or a presentation of share capital would be fine?

comprehensive and material indeed

helped me tounderstand the IFRS

dear waseem…we record purchase cost as 110000.coz we did not avail the discout optiom given by the seller.

I have doubt in IAS 2. Lets say for a example, a manufacturer purchased raw material by giving 4 months pd cheque for 110,000. If they had paid by cash, price would be 100,000. What is treatment for this difference? Can we record this difference of 10,000 as finance charges?

Hey Silvia, I was about to subscribe. But I found that the name of my country (Bangladesh) is not in the list. Please let me know.

thank you for help

wow, made my studies simpler and to make sense…a superb summary indeed.

clearly and comprehensive IAS1 elaborated

Great site and well summarized IASs

very well summarized and it is very good for accounting students. thank you.

Verry good!IAS 1 !

very good indeed.impressed for days

great work………..

Great Vedio…

IT IS WELL ARRANGED OF STATEMENT.

Excellent summarized information of IAS-1

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IAS 1 Presentation of Financial Statements

Presentation of financial statements sets out the overall requirements for the presentation of financial statements, guidelines for their structure, and minimum requirements for their content., access the standard, current proposals, recent amendments, related ifric interpretations, uk reduced disclosures – frs 101, icaew factsheets and guides, icaew articles, other resources.

2023 Issued Standard – IAS 1 The 2023 Issued Standards include all amendments issued up to and including 1 January 2023.

Registration is required to access the free version of the Issued Standards, which do not include additional documents that accompany the full standard (such as illustrative examples, implementation guidance and basis for conclusions).

A complete set of financial statements includes:

A statement of financial position (balance sheet) at the end of the period
A statement of profit or loss and other comprehensive income (income statement) for the period
A statement of changes in equity for the period
A statement of cash flows (cash flow statement) for the period
Notes to the accounts.

The names of the main statements are not mandatory.

IAS 1 Revised also requires a statement of financial position at the start of the earliest comparative period where there has been a retrospective adjustment to the accounts or reclassification of items.

The statement of profit or loss and other comprehensive income, as the name suggests, presents profit and loss for the period as well as other comprehensive income. Other comprehensive income includes income and expenses not recognised in profit or loss such as revaluation surpluses. The statement of profit or loss and other comprehensive income may be presented either as one statement or a separate statement of profit or loss and statement showing other comprehensive income.

The standard provides guidance on the form and content of the financial statements and the underlying accounting concepts. It also requires financial statements to present fairly the position, performance and cash flows of an entity. This is normally achieved by the application of IFRS.

ED/2019/7 General Presentation and Disclosures was issued in December 2019. This is the exposure draft of a proposed new standard that would replace IAS 1. The standard would carry forward most of the current requirements of IAS 1 and add supplementary requirements, including:

Categorising items in profit or loss as operating, investing or financing
Requiring additional profit subtotals
Distinguishing between integral and non-integral associates and joint ventures
Removing the choice of how to present cash flows from dividends and interest
Requiring additional disclosure about unusual items
Providing disclosure of management performance measures.

All amendments issued up to and including the publication date of 1 January 2022 are included within the IFRS Foundation’s latest version of the issued standard: 2022 Issued Standard – IAS 1 . Issued amendments may, therefore, have a mandatory effective date that is later than 1 January 2022 – see below for details.

Any amendments issued after 1 January 2022 will not be included in the IFRS Foundation’s 2022 Issued Standards but will be listed below and identified as such.

See the Corporate Reporting Faculty’s annual IFRS factsheets for a more detailed discussion of recent IFRS amendments.

Mandatory date: Annual periods beginning on or after 1 January 2024. Earlier application is permitted.

Issue date: October 2022 (not included within the IFRS Foundation’s 2022 Issued Standards).

The amendments specify that the classification of a liability as current or non-current is only affected by covenants that an entity must comply with on or before the end of the reporting period. They also require disclosure of information that allows users of financial statements to understand the risk that non-current liabilities with covenants could become repayable within 12 months.

This amendment has been endorsed for use in the UK. It is not yet endorsed for use in the EU as at 25 July 2023. Read more on UK endorsement and EU endorsement of IFRS standards.

For a more detailed discussion of the amendment, read the faculty’s factsheet:

2022 IFRS Accounts

Mandatory date: Annual periods beginning on or after 1 January 2024 (deferred from 2023). Earlier application is permitted.

IAS 1 is amended to clarify that the classification of liabilities as current or non-current should be based on rights that exist at the end of the reporting period. Expectations about whether an entity will exercise a right to defer settlement of a liability do not affect its classification. The amendments also clarify that settlement is the transfer of cash, equity instruments, other assets or services.

The deferral of the effective date to 2024 is included in the Non-current Liabilities with Covenants amendment to IAS 1.

Mandatory date: Annual periods beginning on or after 1 January 2023. Earlier application is permitted.

The amendments to IAS 1:

Require an entity to disclose material accounting policy information rather than significant accounting policies.
Explain that accounting policy information is material if, together with other information in the financial statements, it can reasonably be expected to influence decisions that primary users make.
Provide examples of material accounting policies.
Clarify that accounting policy information relating to immaterial transactions need not be disclosed.

IAS 1 is amended to:

Add finance income and expenses to the list of components of other comprehensive income;
Require line items to be presented in the statement of financial position in respect of contracts that are within the scope of IFRS 17;
Require line items to be presented in the statement of profit or loss in respect of amounts related to contracts within the scope of IFRS 17.

IAS 1 is amended to refer to portfolios of contracts rather than groups of contracts within the scope of IFRS 17.

Mandatory date: Annual periods beginning on or after 1 January 2020. Earlier application is permitted.

The definition of material is amended to be as follows:

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.

Examples of circumstances that may result in material information being obscured are added to the standard as a result of the amendment, as is guidance on users of financial statements.

2020 IFRS Accounts

Mandatory date: Annual periods beginning on or after 1 January 2020. Earlier application is permitted if an entity also applies the amendments to other IFRS Accounting Standards at the same time.

IAS 1 is updated to refer to the 2018 Conceptual Framework rather than the Framework for the Preparation and Presentation of Financial Statements when referring to materiality, definitions of elements and their recognition criteria and the objective of financial statements.

IFRIC 1 Existing Decommissioning, Restoration and Similar Liabilities Addresses accounting for a change in a provision that is included in the carrying amount of an item of PPE.
IFRIC 14 IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction Provides general guidance on how to assess the limit in IAS 19 on the amount of the surplus that can be recognised as an asset. Explains how the pensions asset or liability may be affected when there is a statutory or contractual minimum funding requirement.
IFRIC 17 Distribution of Non-cash Assets to Owners Addresses the accounting for dividends of non-cash assets, including those where there is a cash alternative.
IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments Addresses the accounting by an entity which issues equity instruments in order to settle, in full or part, a financial liability.
IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine Addresses the accounting treatment of mine waste materials, which are the materials removed by mining entities in order to gain access to mineral ore deposits.
IFRIC 21 Levies Provides guidance on when to recognise liability for a levy imposed by a government.
IFRIC 23 Uncertainty over Income Tax Treatments Clarifies how to apply the recognition and measurement requirements of IAS 12 when there is uncertainty over income tax treatments.
SIC 7 Introduction of the Euro The effective start of the EMU after the reporting date does not alter the requirements of IAS 21 at the reporting date.
SIC 25 Income Taxes – Changes in the Tax Status of an Enterprise or its Shareholders Addresses the deferred tax consequences of changes in tax status of an enterprise or its shareholders.
SIC 29 Disclosure – Service Concession Arrangements Prescribes disclosures required by a concession operator and concession provider joined by a service concession arrangement.
SIC 32 Intangible Assets – Website Costs Addresses accounting for costs associated with the development of a website.

UK qualifying parents and subsidiaries can take advantage of FRS 101 Reduced Disclosure Framework. Our FRS 101 page gives more information on which entities qualify and the criteria to be met.

The following amendments must be made to IAS 1 in order to achieve compliance with the Companies Act and related Regulations:

The statement of financial position must comply with the balance sheet format requirements of the Companies Act.
The statement of profit or loss and other comprehensive income must comply with the profit and loss account format requirements of the Companies Act.
Ordinary activities of an entity are defined and extraordinary items are described as highly abnormal material items arising from events falling outside an entity’s ordinary activities.
It is clarified that items of income or expense are not recognised in profit or loss where such recognition is prohibited by the Companies Act.

FRS 101 paragraph 8(f) states that a qualifying entity is exempt from the IAS 1 requirement to present the following within a set of financial statements:

A statement of cash flows for the period;
A third statement of financial position when a retrospective adjustment or reclassification is made;
A statement of compliance with IFRS;
A reconciliation of property, plant and equipment, intangible assets, investment properties, biological assets and the number of shares outstanding at the beginning and end of the comparative period;
Capital management disclosures (this exemption is not available to a financial institution);
All remaining IAS 1 disclosures must be applied.

IAS 1 paragraphs for which exemption is available: 10(d), 10(f), 16, 38A-D, 40A-D, 111, 134-6.

The Corporate Reporting Faculty's annual IFRS factsheets provide a more detailed discussion of recent IFRS amendments.

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Introduction to IFRS - IAS 1 Presentation of Financial Statements

If you would like to dive into the world of international financial reporting standards (IFRS), you have to be aware what IFRS and IAS means, what the difference between the standards and the conceptual framework is, what the fundamental definition of assets and liabilities is, etc. This course provides answers to these questions using practical examples.

The course consists of two parts. First part, after the introduction to the IFRS, explains the most important concepts of the Conceptual Framework. In the second part IAS 1 Presentation of financial statements standard's requirements are presented including practical examples and interim tests to enhance understanding.

This course will enable you to:

understand the concept of international financial reporting standards
identify main features of the Conceptual Framework
understand the qualitative characteristics of useful financial information (fundamental and enhancing)
decide whether the standard or the conceptual framework prevail in case they are in conflict with each other
understand the definition of control
distinguish main accounting considerations and define which are applicable to the primary statements (statement of comprehensive income, statement of financial position, statement of changes in equity, statement of cash flows and notes)

Further information:

Training hours: 60 minutes
Languages: English, Hungarian, Russian, Serbian, Croatian

This e-learning course is part of an e-learning series designed by PwC Academy Hungary which aims to provide a comprehensive overview of the application of IFRS (IAS) standards to finance and accounting experts who are already familiar with fundamental (local) accounting and reporting processes.

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IAS 1 Presentation of Financial Statements

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IAS 1 sets out overall requirements for the presentation of financial statements, guidelines for their structure and minimum requirements for their content. It requires an entity to present a complete set of financial statements at least annually, with comparative amounts for the preceding year (including comparative amounts in the notes). A complete set of financial statements comprises:

a statement of financial position as at the end of the period;
a statement of profit and loss and other comprehensive income for the period. Other comprehensive income is those items of income and expense that are not recognised in profit or loss in accordance with IFRS Standards. IAS 1 allows an entity to present a single combined statement of profit and loss and other comprehensive income or two separate statements;
a statement of changes in equity for the period;
a statement of cash flows for the period;
notes, comprising a summary of significant accounting policies and other explanatory information; and
a statement of financial position as at the beginning of the preceding comparative period 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.

An entity whose financial statements comply with IFRS Standards must make an explicit and unreserved statement of such compliance in the notes. An entity must not describe financial statements as complying with IFRS Standards unless they comply with all the requirements of the Standards. The application of IFRS Standards, with additional disclosure when necessary, is presumed to result in financial statements that achieve a fair presentation. IAS 1 also deals with going concern issues, offsetting and changes in presentation or classification.

Standard history

In April 2001 the International Accounting Standards Board (IASB) adopted IAS 1 Presentation of Financial Statements , which had originally been issued by the International Accounting Standards Committee in September 1997. IAS 1 Presentation of Financial Statements replaced IAS 1 Disclosure of Accounting Policies (issued in 1975), IAS 5 Information to be Disclosed in Financial Statements (originally approved in 1977) and IAS 13 Presentation of Current Assets and Current Liabilities (approved in 1979).

In December 2003 the IASB issued a revised IAS 1 as part of its initial agenda of technical projects. The IASB issued an amended IAS 1 in September 2007, which included an amendment to the presentation of owner changes in equity and comprehensive income and a change in terminology in the titles of financial statements. In June 2011 the IASB amended IAS 1 to improve how items of other income comprehensive income should be presented.

In December 2014 IAS 1 was amended by Disclosure Initiative (Amendments to IAS 1), which addressed concerns expressed about some of the existing presentation and disclosure requirements in IAS 1 and ensured that entities are able to use judgement when applying those requirements. In addition, the amendments clarified the requirements in paragraph 82A of IAS 1.

In October 2018 the IASB issued Definition of Material (Amendments to IAS 1 and IAS 8). This amendment clarified the definition of material and how it should be applied by (a) including in the definition guidance that until now has featured elsewhere in IFRS Standards; (b) improving the explanations accompanying the definition; and (c) ensuring that the definition of material is consistent across all IFRS Standards.

In February 2021 the IASB issued Disclosure of Accounting Policies which amended IAS 1 and IFRS Practice Statement 2 Making Materiality Judgements . The amendment amended IAS 1 to replace the requirement for entities to disclose their significant accounting policies with the requirement to disclose their material accounting policy information.

In October 2022, the IASB issued Non-current Liabilities with Covenants . The amendments improved the information an entity provides when its right to defer settlement of a liability for at least twelve months is subject to compliance with covenants. The amendments also responded to stakeholders’ concerns about the classification of such a liability as current or non-current.

Other Standards have made minor consequential amendments to IAS 1. They include Improvement to IFRSs (issued April 2009), Improvement to IFRSs (issued May 2010), IFRS 10 Consolidated Financial Statements (issued May 2011), IFRS 12 Disclosures of Interests in Other Entities (issued May 2011), IFRS 13 Fair Value Measurement (issued May 2011), IAS 19 Employee Benefits (issued June 2011), Annual Improvements to IFRSs 2009–2011 Cycle (issued May 2012), IFRS 9 Financial Instruments (Hedge Accounting and amendments to IFRS 9, IFRS 7 and IAS 39) (issued November 2013), IFRS 15 Revenue from Contracts with Customers (issued May 2014), Agriculture: Bearer Plants (Amendments to IAS 16 and IAS 41) (issued June 2014), IFRS 9 Financial Instruments (issued July 2014), IFRS 16 Leases (issued January 2016), Disclosure Initiative (Amendments to IAS 7) (issued January 2016), IFRS 17 Insurance Contracts (issued May 2017), Amendments to References to the Conceptual Framework in IFRS Standards (issued March 2018) and Amendments to IFRS 17 (issued June 2020).

Related active projects

IFRS Accounting Taxonomy Update—Primary Financial Statements

Related completed projects

Clarification of the Requirements for Comparative Information (Amendments to IAS 1)

Classification of Liabilities as Current or Non-current (Amendments to IAS 1)

Definition of Accounting Estimates (Amendments to IAS 8)

Disclosure Initiative (Amendments to IAS 1)

Disclosure Initiative (Amendments to IAS 7)

Disclosure Initiative—Accounting Policies

Disclosure Initiative—Definition of Material (Amendments to IAS 1 and IAS 8)

Disclosure Initiative—Principles of Disclosure

Disclosure Initiative—Targeted Standards-level Review of Disclosures

IFRS Accounting Taxonomy Update—Amendments to IAS 1, IAS 8 and IFRS Practice Statement 2

IFRS Accounting Taxonomy Update—Amendments to IFRS 16 and IAS 1

Joint Financial Statement Presentation (Replacement of IAS 1)

Non-current Liabilities with Covenants (Amendments to IAS 1)

Presentation of Items of Other Comprehensive Income (Amendments to IAS 1)

Presentation of Liabilities or Assets Related to Uncertain Tax Treatments (IAS 1)

Presentation of interest revenue for particular financial instruments (IFRS 9 and IAS 1)

Puttable Financial Instruments and Obligations Arising on Liquidation (Amendments to IAS 32 and IAS 1)

Revised IAS 1 Presentation of Financial Statements: Phase A

Supply Chain Financing Arrangements—Reverse Factoring

Related IFRS Standards

Related ifric interpretations.

IFRIC 1 Changes in Existing Decommissioning, Restoration and Similar Liabilities

Unconsolidated amendments

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[100% Off] Learn About Ias 1 Presentation Of Financial Statements

Financial Reporting, IAS 1. Principles of IAS 1, Financial Statement Analysis, Qualitative Characteristics

What you’ll learn

Understanding IAS 1 and Its Importance
Components and Structure of Financial Statements
Current/Non-Current Distinction and Recent Amendments
Qualitative Characteristics of Financial Statements
Requirements for Financial Statements Preparation and Presentation
Minimum Line Items, Subtotals, Classifications, and Disclosures
Accounting Policies, Judgments, Estimates, and Errors

Requirements

Basic accounting knowledge
Understanding of international accounting standards.
Ability to analyze financial statements. Familiarity with business finance concepts. Background in finance or accounting.
Access to relevant resources.
Commitment to learning

Description

Welcome to the comprehensive course on International Accounting Standard 1 (IAS 1) and Financial Reporting. This course is designed to provide you with a solid foundation in financial reporting principles, focusing on the pivotal role of IAS 1 in shaping the preparation and presentation of financial statements. Throughout this course, you will embark on an immersive learning journey, delving into the intricacies of IAS 1 and its significance in fostering transparency, comparability, and credibility in financial reporting practices worldwide.

You will start by exploring the fundamentals of IAS 1, gaining a deep understanding of its objectives, scope, and key principles. You will learn how IAS 1 establishes guidelines for preparing various financial statements, including balance sheets, income statements, statements of changes in equity, and cash flow statements. Through interactive lessons and real-world examples, you will master the art of analyzing and interpreting financial statements, identifying crucial components, and understanding their implications for stakeholders.

As you progress through the course, you will delve into the qualitative characteristics that make financial information useful to users, such as relevance, faithful representation, comparability, and understandability. You will also explore the requirements for financial statement preparation and presentation, including recent amendments, classifications, and disclosures mandated by IAS 1.

By the end of this course, you will be equipped with the knowledge and skills needed to navigate IAS 1 confidently, analyze financial statements effectively, and communicate financial information with clarity and precision. Whether you’re an accounting student, finance professional, or business administrator, this course will empower you to excel in the dynamic field of financial reporting. Join us on this exciting journey as we unlock the secrets of IAS 1 and unravel the mysteries of financial reporting.

Author(s): Hesham Ahmed

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Our Standards are developed by our two standard-setting boards, the International Accounting Standards Board (IASB) and International Sustainability Standards Board (ISSB).

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Accounting for climate change

1 introduction.

1.1 People are increasingly interested in how public organisations are preparing for, and affected by, climate change. Recent extreme weather events have further put the focus on, and need for, transparent and high-quality information about how climate change is affecting public organisations.

1.2 More public organisations are providing information in their annual reports about their greenhouse gas emissions, climate risks, and mitigation. It’s just as important to show how those emissions, risks, and mitigation actions are affecting the organisation’s financial performance, financial position, and cashflows.

1.3 The financial statements also need to include enough appropriate disclosures to explain clearly and simply how these considerations have been accounted for.

1.4 Current accounting standards don’t explicitly require organisations to consider the implications of climate change on financial reporting. But there are various financial reporting aspects that are directly or indirectly affected by climate risks and opportunities – such as impairment, provisions, useful life assessments, and even the “going concern” assumption (having a sound enough financial position to keep operating).

1.5 We’ve set out a high-level summary of how climate change could affect various elements of an organisation’s financial statements. We highlight the main matters that should be considered when financial statements are prepared, to ensure a true and fair presentation and to provide meaningful and adequate information to users of those statements.

2 Climate-related financial risks

2.1 Climate change presents both physical risks to organisations and risks arising from moving to a low-emission operating model (transition risks).

2.2 The physical risks include damage to infrastructure from rising sea levels, supply chain disruptions due to increased severe storm events, and/or chronic changes in weather conditions.

2.3 The transition risks from moving to a low-carbon economy include:

policy risks (such as higher prices on carbon);
regulation risks (such as compliance with new regulations);
technology risks (such as new competition resulting from the move to a low-carbon economy);
market risks (such as changing supply/demand trends due to climate change); and
reputational risks (such as demands or requirements to move away from fossil fuel investments and additional spending on litigation).

2.4 Addressing physical risks and moving to a low-carbon economy means public organisations will need to reconsider their operating models, business structures, investments, and long-term plans. This could significantly affect their financial statements and performance reporting.

2.5 Physical and transition risks can lead to uncertainty, such as stranded or compromised assets, threats to natural resources, regulatory changes, insurance concerns, interruptions to supply chains, coastal property devaluation, and rapidly evolving consumer demands. At worst, climate-related risks can threaten the existence of an organisation and raise questions about its financial ability to keep operating (the “going concern” assumption).

2.6 As well as a need to recognise provisions and liabilities arising from new regulatory requirements, organisations might have obligations arising from their own published plans and commitments to reduce their greenhouse gas emissions.

2.7 The strategies and plans that organisations put in place to reach their emissions reduction targets will have some financial implications and therefore affect the financial statements (either now or in the future). It is critical that finance and accounting teams are kept informed and have complete information about an organisation’s greenhouse gas reduction strategies and plans. They need to be kept up to date with any changes to those plans.

2.8 This means that climate or sustainability teams must interact with finance teams, so the information needed to assess any financial implications can be adequately considered for financial reporting purposes.

3 Using this guidance

3.1 Climate-related risks pose unique challenges for public organisations and their auditors because the estimations and assumptions involve a high level of uncertainty and aren’t always verifiable. But it’s critical that organisations consider the effect of these risks on the financial statements. If a climate-related risk does significantly affect an organisation, senior staff need to evaluate whether the financial statements appropriately reflect it, in keeping with the applicable financial reporting standards.

3.2 Because there’s no specific accounting standard or pronouncement in generally accepted accounting practice that addresses this, we’ve prepared a summary of common financial statement items and aspects that could be affected by climate-related matters. It doesn’t cover everything but provides high-level guidance on the main matters to consider.

3.3 Technically speaking, this information is relevant for organisations using the Tier 1 and Tier 2 For-Profit and Public Benefit Organisations reporting standards issued by the New Zealand Accounting Standards Board. 1

4 Climate change and “property, plant and equipment” standards

Applicable standards: nz ias 16 and pbe ipsas 17.

4.1 Both physical and transitional climate risks could significantly affect an organisation’s property, plant, and equipment. There might be new capital costs or new operating expenses involved in securing assets against physical damage, or in reconstructing or repairing asset damage because of weather events.

4.2 There will also be expenses associated with getting facilities ready for a move to a zero-carbon economy. Recognising the costs for enhancing or repairing property, plant, and equipment in the financial statements as an expense or capitalising it will require careful consideration.

4.3 Climate changes that increase flooding risks, that lead to rising sea levels, or the emergence of modern technologies needed to respond to climate changes could all mean that an organisation needs to reconsider the useful life estimates of its assets.

4.4 Decisions made by the Government or by an organisation in response to climate risks could also have a significant effect on the useful life estimates of property, plant, and equipment. Some examples include the effects of planned or potential responses such as managed retreat, closing facilities, or replacing assets.

4.5 When estimating the useful life of assets, organisations should consider factors such as:

the capability and capacity of assets to cope with expected extreme weather events (for example, the capacity of existing storm water systems or flood protection infrastructure);
the likelihood of a managed retreat;
obsolescence due to the availability of a new, climate friendly, sustainable technology;
legal restrictions;
Government actions;
physical damage; and
an organisation’s long-term plan and carbon reduction strategies.

4.6 The management team in an organisation would need to review the policies for “useful life” assessments, making sure that the estimates of an asset’s useful life are evaluated regularly and kept up to date.

5 Climate change and intangible assets

Applicable standards: nz ias 38 and pbe ipsas 31.

5.1 Transition risks are greater for organisations with climate- or environment-related intangible assets. With technologies quickly evolving, organisations holding patents in areas such as green energy and waste disposal could be particularly affected.

5.2 In accounting terms, the costs of developing a new intangible asset can sometimes be treated as a capital expense. An intangible asset must be something that will provide a future economic benefit for the organisation. With technologies evolving quickly, organisations will need to consider whether the “future economic benefits” test is met before treating development costs as an intangible asset.

5.3 Organisations might also need to rethink the estimates of useful life and the amortisation basis (spreading costs over time) used for intangible assets. They, too, could be affected by technical disruption and emerging technologies.

5.4 Management teams might need to reassess their policies for carrying out useful life assessments and regularly check that the amortisation basis is still appropriate. These factors will also affect intangible assets with an indefinite useful life, because impairment testing would have to be done with more caution.

6 Climate change and accounting for any impairment of assets

Applicable standards: nz ias 36, pbe ipsas 21, and pbe ipsas 26.

6.1 At the end of each reporting period, organisations need to assess whether there are any indications that certain assets could be impaired (meaning the asset’s recoverable amount is lower than the value that asset is recorded as having).

6.2 Climate risks, both physical and transitional, could result in the need to record an impairment of assets in the financial statements. Assets might be physically damaged or become obsolete because a new green technology has emerged or there’s a preference for more sustainable products and services.

6.3 Tier 1 and 2 public benefit organisations will also have to consider the impact of climate risks when determining the remaining service potential of assets that don’t generate cash. These non-cash-generating assets can reduce in value if they’re damaged by or exposed to extreme weather events. Their service potential can also be affected by transitional risks, such as any government restrictions on the use of certain assets or an organisation’s decision to move to lower emission or more sustainable assets and technologies.

6.4 Because assets generate economic benefits, changes in an organisation’s expected cash flows – either a change in the period over which the assets can generate cash flows or a change in the cash flows generated by the asset – can affect the value of the assets.

6.5 In short, it is critical that an organisation factors in any changes in the market’s preference for green technology and sustainable goods or services, and exposure to physical damage, when performing impairment calculations.

7 Climate change and provisions, contingent liabilities, and contingent assets

Applicable standards: nz ias 37 and pbe ipsas 19.

7.1 Climate change risks could affect the liabilities recognised and the related disclosures in the organisation’s financial statements. With increasing regulatory requirements and stakeholder expectations, organisations need to fulfil their climate change obligations and commitments (statutory obligations and constructive obligations). Not meeting them could expose organisations to penalties, fines, and legal action. In financial statements, that means recognising provisions or disclosing contingent liabilities.

7.2 Climate risks could also affect an organisation’s long-term provisions, such as money ear-marked for the cost of dismantling or restoring assets or facilities. Or a decision (from the Government or from the organisation) about a managed retreat could require the organisation to purchase properties or other assets exposed to risk from extreme weather events.

7.3 Organisations are required to provide adequate disclosures about provisions, contingent liabilities, and major assumptions that affect any recognised provisions. Climate change risks could affect some critical assumptions for certain provisions and contingent liabilities. It is sensible to specifically consider regulatory requirements, whether existing contracts could become onerous, and any existing climate-related legal claims.

Financial instruments

7.4 Climate risks have the potential to change how an organisation measures the value of its financial instruments and the disclosures about them. The physical, reputational, and legal risks posed by climate change could increase the organisation’s exposure to credit risks and therefore its calculations of expected losses.

7.5 It would be sensible for organisations to review whether any of their financial assets (specifically borrowers and trade receivables) are exposed to more risk for climate-related reasons and might affect the organisation’s ability to settle the obligations.

7.6 The number of organisations issuing “green debt” and “green investments”, and the funds raised by green debt, have increased in the last couple of years. The increases are expected to continue. Organisations need to consider the requirements of accounting standards in detail when accounting for these types of financial instruments, from classification, to measurement, and to disclosures.

Generally accepted accounting practice requires organisations to provide extensive disclosures about the nature and extent of risks arising from financial instruments (including credit risk, liquidity risk, and market risk) and how these risks are managed. Organisations will need to consider the climate-related aspects of risk and provide adequate disclosure in the financial statements.

Valuation – fair value measurement

7.8 Climate risks could affect the value of assets and liabilities that are measured on a fair value basis. This can be because of changing consumer preferences, market drivers, technology disruptions, regulatory requirements, impact on duration and value of expected cashflows, and/or expected or actual physical damages. When ascertaining fair values, especially where unobservable inputs are used, organisations should consider the broader implications of climate risk on their calculations.

7.9 The fair value calculations for non-cash-generating assets could be affected by factors such as (exposure to) severity and frequency of extreme weather events, government restrictions on the use of assets, or organisation’s strategies and plans to meet their emissions targets.

8 Climate change and the presentation of financial statements

Applicable standards: nz ias1 and pbe ipsas 1.

8.1 “Going concern” is the basic accounting assumption that requires organisations to evaluate their ability and intent to continue to operate for the foreseeable future. Climate change challenges could affect an organisation’s ability to continue as a going concern.

8.2 Organisations need to evaluate their exposure to climate risks and any implications of that for their going concern assumption. If there are uncertainties about it, organisations are required to provide an adequate disclosure to explain the uncertainties.

Judgements and uncertainties

8.3 The estimations, judgements, and assumptions that organisations make about future operations and expectations have a significant impact on their financial statements. Therefore, in keeping with generally accepted accounting practice, an organisation is required to provide appropriate information (disclosures) on the key assumptions and judgements that have been used when preparing the financial statements.

8.4 Disclosing climate-related matters could be essential where those matters are affecting the judgements and assumptions used by management. Organisations should ensure that they provide relevant and reliable information about climate-related aspects, to help users of the financial statements to understand the judgements and assumptions used.

Carbon offsets

Although increasing numbers of organisations are purchasing carbon offsets because they do not expect to achieve their emission reduction targets, there is no specific accounting standard, guidance, or interpretation that specifically deals with accounting for carbon offsets. This means that each organisation needs to have its own policy for accounting for carbon offsets.

8.6 It is debatable whether carbon offsets purchased to offset emissions are assets or expenses. Given the lack of guidance in accounting for carbon offsets, we are interested in supporting auditor judgments about appropriate accounting policies for them. We have encouraged auditors to email their queries to the Audit Quality team at the OAG for consideration.

9 Climate change and forecast financial statements

9.1 When preparing forecast financial statements, public organisations should ensure that the implications of climate-related matters are appropriately estimated and considered. The aspects discussed above are just as relevant to the forecast financials.

9.2 As many public organisations are setting greenhouse gas emissions (reduction) targets and preparing strategies to attain these emissions targets, it is critical that the financial implications and financial impacts of any reduction targets, strategies, and plans are considered in the forecast financial statements.

9.3 It is therefore essential that the climate/sustainability teams interact frequently with the accounting and finance teams to ensure that information needed about climate-related matters is appropriately considered in the forecast financial statements.

1: This guidance does not go into the detail of accounting standards and their requirements. It is not comprehensive nor intended to be a complete guide for accounting. Also, it does not substitute any existing accounting standards or GAAP requirements, nor provide additional requirements.

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COMMENTS

IAS 1
Overview. IAS 1 Presentation of Financial Statements sets out the overall requirements for financial statements, including how they should be structured, the minimum requirements for their content and overriding concepts such as going concern, the accrual basis of accounting and the current/non-current distinction. The standard requires a complete set of financial statements to comprise a ...
PDF Presentation of Financial Statements IAS 1
Approval by the Board of Presentation of Items of Other Comprehensive Income issued in June 2011. Presentation of Items of Other Comprehensive Income (Amendments to IAS 1) was approved for issue by fourteen of the fifteen members of the International Accounting Standards Board. Mr Pacter dissented from the issue of the amendments.
IFRS
IAS 1 sets out overall requirements for the presentation of financial statements, guidelines for their structure and minimum requirements for their content. It requires an entity to present a complete set of financial statements at least annually, with comparative amounts for the preceding year (including comparative amounts in the notes).
International Accounting Standard 1Presentation of Financial Statements
International Accounting Standard 1 Presentation of Financial Statements (IAS 1) is set out in paragraphs 1⁠-⁠140 and the Appendix. All the paragraphs have equal authority. IAS 1 should be read in the context of its objective and the Basis for Conclusions, the Preface to IFRS Standards and the Conceptual Framework for Financial Reporting.
Presentation of Financial Statements (IAS 1)
IAS 1 serves as the main standard that outlines the general requirements for presenting financial statements. It is applicable to 'general purpose financial statements', which are designed to meet the informational needs of users who cannot demand customised reports from an entity. Documents like management commentary or sustainability ...
IAS 1 Presentation of Financial Statements: Summary
IAS 1 explains the general features of financial statements, such as fair presentation and compliance with IFRS, going concern, accrual basis of accounting, materiality and aggregation, offsetting, frequency of reporting, comparative information and consistency of presentation.. Structure and Content. IAS 1 requires identification of the financial statements and distinguishing them from other ...
PDF Guide to annual financial statements
Specific guidance on materiality and its application to the financial statements is included in paragraphs 29-31 of IAS 1 Presentation of Financial Statements. Preparers may also consider Practice Statement 2 Making Materiality Judgements, which provides guidance and examples on applying materiality in the preparation of financial statements.
IAS 1 Presentation of Financial Statements
IAS 1 Revised also requires a statement of financial position at the start of the earliest comparative period where there has been a retrospective adjustment to the accounts or reclassification of items. The statement of profit or loss and other comprehensive income, as the name suggests, presents profit and loss for the period as well as other ...
Introduction to IFRS
The course consists of two parts. First part, after the introduction to the IFRS, explains the most important concepts of the Conceptual Framework. In the second part IAS 1 Presentation of financial statements standard's requirements are presented including practical examples and interim tests to enhance understanding.
PDF Financial Statement Presentation
financial statements themselves. [IAS 1.5] 7 Similarly, entities that do not have equity as defined in IAS 32 Financial Instruments: Presentation (eg some mutual funds), and entities whose share capital is not equity (eg some co-operative entities), may need to adapt the financial statement presentation of members' or unitholders' interests.
Introduction to IFRS
This course provides answers to these questions using practical examples. The course consists of two parts. First part, after the introduction to the IFRS, explains the most important concepts of the Conceptual Framework. In the second part IAS 1 Presentation of financial statements standard's requirements are presented including practical ...
Presentation of Financial Statements (IAS 1)
For instance, a balance sheet may now be referred to as a statement of financial position. Furthermore, the revised IAS 1 has also introduced a new statement, the statement of comprehensive income. IAS 1 offers the choice of presenting all items of income and expense recognized in the period: Either in a single statement or in two statements.
PDF IAS 1 PRESENTATION OF FINANCIAL STATEMENTS
IAS 1 Presentation of financial statements 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. To achieve this objective, IAS 1 sets out overall requirements for the ...
PDF The Essentials—Presentation of Financial Statements
In this Essentials, we highlight two of the principles in IAS 1: 1. Financial statements should fairly present the company's performance; and. 2. Disclosure of immaterial items can obscure material information. We explain how investors can use their knowledge of these fundamental principles of IFRS to have an efective dialogue with management ...
IAS 1
Overview. IAS 1 Presentation of Financial Statements sets out the overall requirements for financial statements, including how they should be structured, the minimum requirements for their content and overriding concepts such as going concern, the accrual basis of accounting and the current/non-current distinction. The standard requires a complete set of financial statements to comprise a ...
IAS 1 Presentation of Financial Statements
IAS 1 Presentation of Financial Statements. 1h 39m. Learn the key accounting principles to be applied to financial statements, including fair presentation and compliance with IFRS Standards. Last Updated: April 2024. Back.
IFRS
IAS 1 sets out overall requirements for the presentation of financial statements, guidelines for their structure and minimum requirements for their content. It requires an entity to present a complete set of financial statements at least annually, with comparative amounts for the preceding year (including comparative amounts in the notes).
IASB issues IFRS 18 on financial statements presentation and disclosure
IFRS 18 replaces International Accounting Standard (IAS) 1, Presentation of Financial Statements, although it carries forward many requirements from IAS 1 unchanged. IFRS 18 is the culmination of the IASB's Primary Financial Statements project. In addition to the new standard, the IASB has also issued Illustrative Examples and a Basis for ...
Communicating financial performance is changing
The way companies communicate their financial performance is set to change. Responding to investor calls for more relevant information, IFRS 18 Presentation and Disclosure in Financial Statements 1 will enable companies to tell their story better through their financial statements. Investors will also benefit from greater consistency of presentation in the income and cash flow statements, and ...
IAS 1
Volume A - A guide to IFRS reporting Volume B - Financial Instruments - IFRS 9 and related Standards Volume C - Financial Instruments - IAS 39 and related Standards Volume D - IFRS 17 Insurance Contracts IFRS disclosures in practice Illustrative financial statements for IFRS reporters Illustrative disclosures for insurers applying IFRS 17 Illustrative disclosures for Banks applying IFRS 7 as ...
Presentation of Financial Statements: IAS 1 Overview &
An entity that shall present with equal prominence all of the financial statements. (par. 11) General Features of Financial Statements 1. Fair Presentation and Compliance with IFRSs It requires the faithful representation of the effects of transactions, other events, and conditions by the definitions and recognition criteria for assets ...
IAS 1Presentation of Financial Statements
The Board issued an amended IAS 1 in September 2007, which included an amendment to the presentation of owner changes in equity and comprehensive income and a change in terminology in the titles of financial statements. In June 2011 the Board amended IAS 1 to improve how items of other income comprehensive income should be presented.
PDF Presentation of Financial Statements
1 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 ...
[100% Off] Learn About Ias 1 Presentation Of Financial Statements
This course is designed to provide you with a solid foundation in financial reporting principles, focusing on the pivotal role of IAS 1 in shaping the preparation and presentation of financial statements. Throughout this course, you will embark on an immersive learning journey, delving into the intricacies of IAS 1 and its significance in ...
IFRS 18
IFRS 18 - Insights for financial services companies. Publication date: 07 May 2024. ca In brief INT2024-08. Key points. The IASB has issued IFRS 18, the new standard on presentation and disclosure in financial statements, with a focus on the statement of profit or loss. This In brief highlights some key elements most relevant to the financial ...
IFRS
IAS 1 Presentation of Financial Statements. In order to view our Standards you need to be a registered user of the site. A free 'Basic' registration will give you access to Issued Standards in HTML or PDF. If you're an IFRS Digital subscriber you will get access to the Required Standards, and be able to use the annotation and taxonomy layers ...
Accounting for climate change
Accounting for climate change. 10 May 2024: We have produced a guide to considering the implications of climate costs, risks, and uncertainties in your financial reporting. 1 Introduction 2 Climate-related financial risks 3 Using this guidance 4 Climate change and "property, plant and equipment" standards Applicable standards: NZ IAS 16 and ...
IASB issues new standard providing a reduced disclosure ...
The International Accounting Standards Board (IASB) has published the new standard IFRS 19 'Subsidiaries without Public Accountability: Disclosures', which permits a subsidiary to provide reduced disclosures when applying IFRS Accounting Standards in its financial statements. IFRS 19 is optional for subsidiaries that are eligible and sets out the disclosure requirements for subsidiaries that ...
City of Houston proposed budget for FY '25 announced by Mayor ...
Mayor John Whitmire recently delivered a hard statement about the City of Houston's financial condition. "I think we can all agree on that, we are broke. This gives us a chance to discuss the ...