International Accounting Standard (IAS) No. 1, Presentation of Financial Statements, sets out the following general requirements.
Required Financial Statements
A complete set of financial statements includes a balance sheet, an income statement, a statement of changes in shareholders’ equity, a cash flow statement, and notes summarizing significant accounting policies and other explanatory notes.
Fundamental Principles of Preparation
Fair presentation requires faithful representation of the effects of transactions, events and conditions in accordance with the definitions and recognition criteria for assets, liabilities, income and expenses set out in the Framework.
Financial statements are prepared on the basis of the firm being an ongoing entity (going concern). If the firm is being liquidated or will cease business, this must be disclosed.
Financial statements will be prepared on the accrual basis of accounting.
Presentations and classifications should be consistent from one period to the next.
Omissions or misstatements are material if they could influence the economic decisions taken by financial statement users. Material items should be presented separately.
Each material class of similar items is presented separately, as are dissimilar items unless they are immaterial.
Assets and liabilities, or income and expenses, shall not be offset unless specifically required or permitted by an IFRS.
The balance sheet should distinguish between current and non-current assets and liabilities unless a liquidity-based presentation provides more relevant and reliable information.
IAS No. 1 outlines the minimum information that must be presented on each financial statement and in the notes.
All amounts reported in a financial statement should have comparable information for the prior period.For more information, see all articles on: Accounting, Financial Statement Analysis See also: