IAS 1: Presentation of Financial Statements

Question 1

What are and explain the 6 general features relating to presentation of financial statements?

Answer 1

1) Fair presentation of statements and their elements & compliance with international standards.
2) Going concern and accrual basis.
3) Materiality (size & nature and influence of users. Should be seperate) & Aggregation (adding classes)
4) Offsetting
5) Frequency of reporting (annnually)
6) Comparative info (previous period should be similar) & consistency of presentation.

Question 2

Distinguish between:
1) Current Assets vs Non-current Assets
2) Current Liabilities vs Non-current
And explain why these distinctions are useful?

Answer 2

Multiple criteria to be met
1) CA: Sold/Consumed within operating cycle and held for trade
2) CL: Settled within operating cycle and held for trade
Distinction:
CA & CL: Working Capital
NCA & NCL: Longterm
Along with assets to be realized and liabilities due within operating cycle

Question 3

Explain the purpose & structure of the SOCE

Answer 3

Purpose: Show how each component of equity changed during an accounting period.
Structure:
1) Total Income
2) Effects of accounting policies
3) Reconciliation of opening & closing balances for the Profit/loss, other incomes & Equity.

Question 4

List the main types of info to be provided in the notes of financial statements

Answer 4

1) Info on measurement bases & accounting policies.
2) Info as required by international standards,
3) Additional info that’s relevant to understanding of statements.