PAS 1 Presentation of financial statements Flashcards
prescribes the basis for presentation of general purpose financial statements to improve
comparability
PAS 1
comparability both with the entity’s financial statements of previous periods
intra-comparability
comparability both with financial statements of other entities
inter-comparability
those intended to serve users who do not have the authority to demand financial reports tailored for their own needs
General Purpose Financial Statements
General purpose financial statements cater to most of
the _____________ of a wide range of ______________
common needs
external users
General purpose financial statements are the subject
matter of the ___________________
Conceptual Framework and the PFRSs.
Complete set of financial statements:
- Statement of financial position
- Statement of profit or loss and other comprehensive income
- Statement of changes in equity
- Statement of cash flows
- Notes
(5a) comparative information in respect of the preceding period; and
- Additional statement of financial position (required only when certain instances occur)
What are the general features of financial statements?
- Fair Presentation and Compliance with PFRSs
- Going Concern
- Accrual Basis of Accounting
- Materiality & Aggregation
- Offsetting
- Frequency of reporting
- Comparative Information
- Consistency of presentation
The Fair Presentation and Compliance with PFRSs is the ______________, with additional ___________ when necessary, is presumed to result in financial statements that achieve a ____________.
application of PFRSs
disclosure
fair presentation.
An entity is not a going concern if, as of the financial reporting date or prior to the date of
authorization of the financial statements for issue, management either:
a. Intends to liquidate the entity or to cease trading, or
b. Has no realistic alternative but to do so.
The assessment of going concen is at least ______________.
12 months
An entity shall prepare its
financial statements, except for _______________, using
the ________________
cash flow information
accrual basis of accounting.
In materiality and aggregation, each material class of similar items must be _______________
in the financial statement
presented separately
Assets and liabilities, and income and expenses, shall __________ unless required or permitted by a PFRS
not be offset
Measuring assets net of valuation allowances, for example, obsolescence allowances on inventories, allowances for doubtful accounts on receivables, and accumulated
depreciation on property, plant, and equipment are ________
not offsetting.
____________ - An entity shall present a complete set of financial statements (including
comparative information) ________.
Frequency of reporting
at east annually.
When an entity changes the end of its reporting period and presents financial statements for a period longer or shorter than one year, an entity shall
disclose the following:
- The period covered by the financial statements,
- The reason for using a longer or shorter period, and
- The fact that amounts presented in the financial
statements are not entirely comparable.
An entity shall present _________ in respect of the _______ for all amounts reported in the current period’s financial statements, unless other standards permit or require otherwise
comparative information
preceding period
_____ - An entity shall retain the __________ of items in the financial statements from one period to the next
Consistency of presentation
presentation and classification
An entity shall retain the
presentation and classification of items in the financial
statements from one period to the next unless:
a. it is apparent that another presentation or classification
would be more appropriate following a significant change
in the nature of the entity’s operations or a review of its
financial statements; or
b. a PFRS requires a change in presentation.
An additional statement of financial position is
presented as at the beginning of the preceding period when an entity:
- Applies an accounting policy retrospectively, or
- Makes a retrospective restatement of items in its
financial statements, or - reclassifies items in its financial statements.
…..and the effect of the event to the statement of financial position as at the beginning of the preceding period is material.
A statement of financial position may be presented as either:
Classified
Unclassified (based on liquidity)
showing distinctions between current and noncurrent assets and liabilities
classified
showing no distinction between current and noncurrent items
Unclassified or based on liquidity
An entity shall classify an asset as current when:
- it expects to realize the asset or intends to sell or
consume it, in its normal operating cycle; - it holds the asset primarily for the purpose of trading;
- it expects to realize the asset within twelve months
after the reporting period; or - the asset is cash or a cash equivalent 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 a liability as current when:
- it expects to settle the liability in its normal
operating cycle; - it holds the liability primarily for the purpose of
trading; - the liability is due to be settled within twelve
months after the reporting period; or - the entity does not have an unconditional right
to defer settlement of the liability for at least
twelve months after the reporting period.
What are the general rule in currently maturing long-term liabilities?
Currently maturing long term
liabilities are presented as current liabilities
Currently maturing long term
liabilities are presented as current liabilities, what are the exceptions?
- Refinancing agreement is fully completed on or before
the balance sheet date – non-current liability - Refinancing agreement after the balance sheet date
but before the financial statements are authorized for
issue – noncurrent liability if the entity expects, and
has the discretion, to refinance it on a long-term basis
under an existing loan facility.
Conceptual Framework & Acctg. Standards
What are the general rule in breach of loan agreement?
A liability that is payable
on demand is a current liability.
A liability that is payable
on demand is a current liability. What are the exceptions?
It is presented as non-current
liability if the lender provides the entity, on or before the balance sheet date, a grace period ending at least 12 months after the balance sheet date to rectify a
breach of loan covenant.
presented as noncurrent items in a classified statement of financial
position, irrespective of their
expected dates of reversal.
Deferred tax liabilities (assets)
Minimum line items in the statement of financial position:
a. Property, plant and equipment;
b. Investment property;
c. Intangible assets;
d. Financial assets (excluding amounts shown under (e), (h)
and (i));
e. Investments accounted for using the equity method;
f. Biological assets;
g. Inventories;
h. Trade and other receivables;
i. Cash and cash equivalents;
j. Assets (or disposal groups) classified as held for sale in
accordance with PFRS 5
k. Trade and other payables;
l. Provisions;
m. Financial liabilities (excluding amounts shown under (k)
and (l));
n. Liabilities and assets for current tax, as defined in PAS 12
Income Taxes;
o. Deferred tax liabilities and deferred tax assets, as defined
in PAS 12;
p. Liabilities included in disposal groups classified as held
for sale in accordance with PFRS 5;
q. Non-controlling interests, presented within equity; and
r. Issued capital and reserves attributable to owners of the
parent
True or false
PAS 1 does prescribe the order or format in which an entity presents items.
false- it does not
An entity shall present all items of income and expense recognized in a period:
- in a single statement of profit or loss and other
comprehensive income; or - in two statements: (1) a statement displaying the
profit or loss section only (separate ‘statement of
profit or loss’ or ‘income statement’) and (2) a
second statement beginning with profit or loss and
displaying components of other comprehensive
income.
True or false
PAS 1 prohibits the presentation of any items of income or expense as extraordinary items
in the statement(s) presenting profit or loss and other comprehensive income or in the
notes.
True
Other comprehensive income for the period:
a. Changes in revaluation surplus
b. Unrealized gains and losses on investments in FVOCI
securities
c. Remeasurements of the net defined benefit liability (asset)
d. Gains and losses arising from translating the financial
statements of a foreign operation
e. Effective portion of gains and losses on hedging instruments in a cash flow hedge
- OCI may be presented either (a) net of tax or (b) gross of tax.
________ are amounts reclassified to profit or loss in the current period that were recognized in other comprehensive income in the current or previous periods.
Reclassification adjustments
Total comprehensive income comprises all components of:
1.Profit or loss; and
2.Other comprehensive income.
Presentation of Expenses:
- Nature of expense method
- Function of expense method
If an entity classifies expenses by ______, it shall
_____ additional information on the __________
function
disclose
nature of
expenses
Dividends declared by an entity are disclosed either
in the
.
(a) notes or
(b) statement of changes in
equity
Order of presentation of
disclosures in the Notes
- Statement of compliance with PFRSs;
- Summary of significant accounting policies
applied; - Supporting information for items presented in the
other financial statements; and - Other disclosures.
