LACPA- IFRS Seminars IAS 1 Presentation of Financial Statements Presented by – Roger Nasr, Deloitte

Structure of the standard IAS 1 Structure of the standard Objective and scope Purpose of Financial statements Components of Financial Statements Definitions Overall considerations Structure and content

Objective and scope Objective Scope IAS 1 Objective and scope Objective to prescribe basis for presentation of “General Purpose” financial statements in order to ensure comparability Scope all general purpose financial statements prepared under IFRS not condensed interim financial information

Purpose of Financial statements Structured Presentation of Financial Position Financial Performance Results of Management Stewardship of the resources entrusted to it

Components, complete set of financial statements IAS 1 Components, complete set of financial statements Balance sheet Income statement Statement of changes in equity Cash flow statement Notes Accounting policies Explanatory notes

Definitions Impracticable requirement IFRS Material Entity can not apply it after making every reasonable effort IFRS IFRS, IAS, IFRIC or SIC Material Omission or misstatement is material if it can influence the economic decision of users

Overall considerations IAS 1 Overall considerations Fair presentation achieved through application of IFRS disclose compliance with IFRS full compliance with IFRS required application before effective date disclose that fact true and fair override only in extremely rare circumstances

Overall considerations IAS 1 Overall considerations Fair presentation In extremely rare circumstances, where compliance with a Standard would be misleading so it would conflict with objective set out in the framework departure is permissible, if regulatory framework requires or does not prohibit Specified disclosure required

Overall considerations IAS 1 Overall considerations Going concern no intention to liquidate or to cease trading Disclose in case of Material uncertainty Accrual basis - transactions and events are recognised when they occur, and in the periods to which they relate Consistency presentation & classification be retained Unless change in nature of operations necessitates another presentation A standard or an interpretation requires a change

Overall considerations IAS 1 Overall considerations Materiality & aggregation material  present separately immaterial  aggregate with other items Offsetting Assets/Liabilities, and Income and expenses shall not be offset unless required or permitted Comparative information incl. narrative & descriptive information

Structure and content IAS 1 General identification of financial statements clearly distinguished from other information reporting period at least annually, to explain if longer or shorter Information required Name and change, if any Individual or group financials Period covered Currency Level of rounding

Structure and content Balance sheet IAS 1 Structure and content Balance sheet current vs. non-current distinction or, classify based on liquidity if more relevant obligatory line items on face of B/S disclosure required on face or in notes relevant sub-classifications of items above information on share capital and reserves

Structure and content Minimum Items on face of Balance Sheet Property, Plant and Equipment Investment Property Intangible Assets Financial Assets Investments Accounted for using the equity method Biological Assets Inventories Trade and Other receivables Cash and Cash Equivalents Trade and Other Payables Provisions Financial liabilities Liabilities and Assets for current tax Deferred tax assets and liabilities Minority interest within equity Issued Capital and reserves attributable to equity holders of the parent

Structure and content Current vs. non-current Assets IAS 1 Structure and content Current vs. non-current Assets Realised/settled in the normal course of operating cycle or within 12 month of the balance sheet date Held primarily for the purpose of being traded Unrestricted cash or a cash equivalent All other assets are non-Current

Structure and content Current Vs. non Current Liabilities Settled in the normal course of operating cycle or due to be settled within 12 month of the balance sheet date Held primarily for the purpose of being traded No unconditional right to defer settlement for at least 12 months post-balance sheet events (refinancing, correction of defaults) do not affect current vs. non-current classification All other Liabilities are non-Current

Structure and content IAS 1 Income statement obligatory line items on face of I/S To show as allocation Profit or loss attributable to Minority Interest Profit or loss attributable to equity holders of the parent expenses analysed on basis of nature Function Dividends should be disclosed plus per share (or in statement of changes in equity

Structure and content Minimum Items on the face of the income statement Revenue Finance Costs Share of profit/loss of associates accounted for at the equity method Tax expense Sum of profit or loss on discontinued operations plus gain or loss on the disposal of discontinued operations assets Profit or loss No operating income/loss No extraordinary items

Structure and content Income Statement presentation IAS 1 Structure and content Income Statement presentation classification based on nature salaries, depreciation, transport, etc classification based on function cost of sales, distribution, administration

Structure and content Statement of changes in equity IAS 1 On the face separate component of financial statements On the face (a) Profit or loss for the period (b) gains and losses not reflected in income statement (a)+(b) attributable to each of Minority Interest and equity holders of the parent also in statement or in the notes capital transactions with owners movements in accumulated profit movements in capital and reserves

Structure and content Role of statement of changes in equity IAS 1 Structure and content Role of statement of changes in equity broader performance indicator ‘total recognised gains and losses’ or ‘comprehensive income’ Cash flow statement in accordance with IAS 7

Structure and content Notes to the financial statements IAS 1 Structure and content Notes to the financial statements basis of preparation of financial statements accounting policies selected additional disclosure to present fairly other sundry disclosures e.g. domicile, legal form, country of incorporation

IAS 1 Case study 01 Income statement presentation

Classification by function