Topic list Syllabus reference

Presentation of published financial statements

Topic list	Syllabus reference
1 IAS 1 Presentation of Financial Statements	D1
2 Statement of financial position	D1
3 The current/non-current distinction	D1
4 Statement of profit or loss and other comprehensive income	D1
5 Statement of profit or loss	D1
6 Revision of basic accounts	D1
7 Changes in equity	D1
8 Notes to the financial statements	D1

Introduction
The bulk of this Study Text looks at the accounts of limited liability companies, either single companies or groups of companies.
We begin in this chapter by looking at the overall content and format of company financial statements. These are governed by IAS 1 Presentation of Financial Statements.
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Study guide

		Intellectual level
D1	Preparation of single entity financial statements
(a)	Prepare an entity's statement of financial position and statement of profit or loss and other comprehensive income in accordance with the structure and content prescribed within IFRS and with accounting treatments as identified within syllabus sections A, В and C	2
(b)	Prepare and explain the contents and purpose of the statement of changes in equity	2

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11AS1 Presentation of Financial Statements
IAS 1 covers the form and content of financial statements. The main components are:

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  Statement of financial position
  
• 
  Statement of profit or loss and other comprehensive income
  
• 
  Statement of changes in equity
  
• 
  Statement of cash flows
  
• 
  Notes to the financial statements
  

1. 
   Profit or loss for the year
   

The statement of profit or loss and other comprehensive income is the most significant indicator of a company's financial performance. So it is important to ensure that it is not misleading.
IAS 1 stipulates that all items of income and expense recognised in a period shall be included in profit or loss unless a Standard requires otherwise. (IAS 1: para. 88)
Circumstances where items may be excluded from profit or loss for the current year include the correction of errors and the effect of changes in accounting policies. These are covered in IAS 8. (IAS 1: para. 89)

2. 
   How items are disclosed
   

IAS 1 specifies disclosures of certain items in certain ways:

• 
  Some items must appear on the face of the statement of financial position or statement of profit or loss and other comprehensive income.
  
• 
  Other items can appear in a note to the financial statements instead.
  
• 
  Recommended formats are given which entities may or may not follow, depending on their
  

circumstances. (IAS 1: paras. 79, 97)
Obviously, disclosures specified by other standards must also be made, and we will mention the necessary disclosures when we cover each statement in turn. Disclosures in both IAS 1 and other standards must be made either on the face of the statement or in the notes unless otherwise stated, ie disclosures cannot be made in an accompanying commentary or report.

3.