NZ IAS 1 Presentation of Financial Statements

NZ IAS 1 Objective – prescribe the basis for presentation of general purpose financial statements (para 1) Scope – applies to all general purpose financial statements prepared and presented in accordance with NZ IFRSs (para 2) Financial statements are a structured representation of the financial position and financial performance of an entity (para 9)

Financial statements… Statement of comprehensive income Statement of financial position Statement of changes in equity Statement of cash flows Notes, comprising a summary of significant accounting policies and other explanatory notes (para 10(e)) Note that the use of these names is not mandatory

Overall considerations Fair (faithful) presentation (para 15) and compliance with NZ IFRS – explicit unreserved statement needs to be made (para 16) Going-concern basis (paras 25 & 26) Accrual basis of accounting (paras 27 & 28) Materiality & aggregation (paras 7 and 29-31) Offsetting (paras 32–35) Frequency of reporting (paras 36–37) Comparative information (paras 38-44) Consistency of presentation (paras 45 & 46)

Statement of Financial Position The Statement of financial position is the basis for evaluating capital structure, liquidity, solvency and financial flexibility as well as for computing rates of return Has limitations such as the optional measurement of assets (cost or revaluation models) and omission of internally generated intangible assets Should always be read in conjunction with the Notes

Classification Minimum requirements for display on the face of the Statement of Financial Position (line items) are in para 54 Further line items can be displayed if relevant to an understanding of an entity’s financial position (para 55) Items are classified on the basis of being current or non-current (current implies being sold, consumed or realised within the normal operating cycle or within 12 months of balance date) Note that items are usually displayed in liquidity order

Further information Paras 77 & 78 note the sub classifications line items that need to be displayed – this is usually complied with in the Notes Property, plant and equipment (see NZ IAS 16 para 73) Receivables Inventories (see NZ IAS 2 para 36) Provisions Contributed equity & reserves Note the disclosure for share capital (para 79)

Statement of Comprehensive Income Total comprehensive income represents the change in equity resulting from transactions and other events other than changes resulting from transactions with owners in their capacity as owners (para 7) such as share issues or dividend payments The statement presents the total of income less expense (profit or loss) followed by other comprehensive income Other comprehensive income includes: Changes in revaluation surplus (PPE/Intangibles); Exchange differences on translating foreign operations; Actuarial gains/losses on defined benefit pension plans; Gains/losses on remeasuring available for sale financial assets; Effective portion of gains/losses on hedging instruments in a cash flow hedge; Share of other comprehensive income (after tax) of associates and equity accounted joint ventures

Presentation Minimum line items required on face of statement (para 82) are: Revenue Finance costs (separate from other expenses) Share of profits/(losses) of associates and joint ventures accounted for under the equity method Tax expenses Profit/(loss) (Non-controlling interest/Owners of parent) Each component of other comprehensive income Share of comprehensive income of associates and joint ventures Total comprehensive income (NCI/Owners of parent)

Material items When items of income or expense are material, an entity needs to disclose their nature and amount separately (para 97). These include (para 98): Inventory and PPE write-downs/impairment Cost of restructuring Disposals of PPE and other investments Profit/(losses) re discontinuing operations Litigation settlements Reversals of provisions

Additional information Expenses are classified either on nature or function basis (para 99) - See examples in paras 102 & 103 If classifying by function, must disclose additional information on the nature of expenses, including depreciation, amortisation and employee benefits (para 104) Must also disclose: Fees to auditors, disclosing separately fees for: audit, audit-related aspects such as assurance work, tax and any other services (para NZ105.1) Total donations made (para NZ105.2)

Revenue Revenue must be presented separately on the face of the Statement of Comprehensive Income NZ IAS 18 Revenue requires that the amount of each significant category of revenue is presented separately and at minimum: Revenue from the sale of goods Revenue from the rendering of services Interest Royalties Dividends If any of the above include revenue arising from exchanges of goods and services, rather than being settled in cash, those amounts of revenue must be disclosed separately.

Statement of Changes in Equity This discloses total comprehensive income and changes in owner related equity Specifically, the following is disclosed on the face of the statement (para 106): Total comprehensive income for the period For each component of equity, the effects of retrospective application or restatement as per NZ IAS 8 For each component of equity a reconciliation between the opening and closing carrying amount, separately disclosing changes from profit or loss; each item of other comprehensive income; and transactions with owners (e.g. contributions and distributions)

Notes Notes enhance the information in the financial statements (para 7) Each item on the face of the statements is cross-referenced to any related information in the Notes Order of Notes (as per para 114): Statement of compliance with IFRSs Summary of significant accounting policies Supporting information for items on face of statements Other disclosures such as contingent liabilities, unrecognised contractual commitments and non-financial disclosures (e.g. entity’s financial risk management objectives and policies)