IAS 1

 Statement of financial position  Statement of profit or loss & other comprehensive income  Statement of changes in equity  Statement of cash flows  Notes, comprising a summary of significant accounting policies & other explanatory information  Comparative information iro of preceding period  New accounting policy applied retrospectively or restatement – 3 rd statement of financial position

 Statement of financial position: Assets (non-current & current) Liabilities (non-current & current) Equity  Statement of profit or loss & other comprehensive income: Profit or loss for the year FIRST (par. 82) Other comprehensive income or loss LAST (par. 82A)

 Statement of changes in equity Share capital Accumulated profit of loss Reserves  Statement of cash flows Cash flows from operating activities Cash flows from investing activities Cash flows from financing activities

ASSETS:  Property, plant & equipment  Investment property  Intangible assets  Financial assets  Investments  Biological assets  Trade and other receivables  Cash and cash equivalents  Total assets classified as held for sale  Assets for current tax  Deferred tax assets NB – consider liquidity, nature and function

 CURRENT ASSETS: Expect to realise, sell or consume asset within 12 months after reporting date; Held mainly for purpose of being traded; Expected to be sold, used or realised (converted into cash) as part of the normal operating cycle; or Asset is cash or cash equivalents, unless restricted to from being exchanged or used to settle a liability for at least 12 months after reporting date.  NON-CURRENT ASSETS: Any assets that are not current assets

 Example: Era Limited has the following 2 assets at its financial year ended 31 December Inventory – this is slow-moving inventory and is expected to be sold during Fixed deposit – this matures on 30 June 2016

LIABILITIES:  Trade and other payables  Provisions  Financial liabilities  Liabilities for current tax  Deferred tax liabilities  Total liabilities classified as held for sale NB – consider amount, timing & nature

 CURRENT LIABILITIES: Expect to be settled/paid within 12 months after reporting date; Held mainly for purpose of being traded; Expected to be settled/paid within the normal operating cycle; or If the entity does not have an unconditional right to delay settlement beyond the 12-month period  NON-CURRENT LIABILITIES: Any assets that are not current assets

 Example: Pixi Limited has a bank loan of N$ at 31 December 2013, payable in 2 instalments of N$ each. The first instalment is payable on 31 December 2014.

Example: The accountant of Logi Limited has presented you with the following list of items:  Cash in the bank and a 15-month fixed deposit  Property, plant & equipment and intangible assets  Inventory and intangible assets  A long-term loan, 20% of which is repayable within 12 months of reporting date  Provisions and tax payable For each of the items listed above, indicate whether they need to be presented as separate line items or together. Explain your answer

EQUITY:  Issued share capital and share premium  Accumulated profit or loss  Reserves  Non-controlling interests For each class of share capital, the following should be disclosed:  Number of shares authorised  Number of shares issued and fully paid for  Number of shares issued but not yet fully paid for  Par value per share or that they may not have a par value  Reconciliation of the number of outstanding shares at the beginning and end of the year  Rights, preferences and restrictions attaching to that class  Shares in the entity held by the entity itself, or its subsidiaries or associates  Shares reserved for issue under options and sales contracts, including terms and amount

PROFIT OR LOSS:  Revenue  Gains and losses arising from the derecognition of financial assets  Finance costs and interest income  Share of profit or loss of associates and joint ventures  Gains and losses arising from fair value adjustments of financial assets/liabilities  Tax expense  Profit or loss from discontinued operations  Profit or loss for the period attributable to owners of the parent and non-controlling interests

OTHER COMPREHENSIVE INCOME:  IAS 16 – changes in revaluation surplus  IAS 19 – remeasurements of defined benefit plans  IAS 21 – gains & losses arising from translating a foreign operation’s financial statements  IAS 9 – gains and losses from various financial instrument transactions  Above items grouped as under the sub-headings items may never be reclassified to p&l or items that may be reclassified to p&l  Items can be presented before or after tax  Tax effect of each item should be presented on the face or in the notes OTHER COSIDERATIONS:  Single statement or two statement layout

ANALYSIS OF EXPENSES:  Nature method – expenses presented based on their nature and not allocated to the different functions within the entity  Function method – expenses classified into the different functions of the business  Generally 4 main functions – sales, distribution, administration & other operations  Material expenses (nature and amount) to be disclosed separately – either on the face on in the notes

 IAS 1, paragraph 15: Financial statements shall present fairly the financial position, financial performance and cash flows of an entity.  HOW? Application of the standards (IAS & IFRS) Additional disclosures Faithful presentation of the effects of transactions (free from error) Conceptual framework definitions & recognition criteria (relevant, comparable, understandable)

 Compliance with IAS/IFRS misleading – the following disclosures required : Management’s conclusion that the financial statements fairly present the entity’s financial position, financial performance & cash flows Declaration that entity has complied with IFRS except that it has departed from a particular requirement in order to achieve fair presentation Name of the standard from which there has been departure Nature of departure, including treatment that was required by the standard Reason why treatment was considered to be misleading Alternative treatment adopted & financial impact of departure

 Conceptual framework par 4.1 The financial statements are normally prepared on the assumption that an entity is a going concern and will continue in operation for the foreseeable future.  IAS 1 par.25 When preparing financial statements, management shall make an assessment of an entity’s ability to continue as a going concern. An entity shall prepare financial statements on a going concern basis unless management either intends to liquidate the entity or to cease trading, or has no realistic alternative but to do so.

Management must assess whether the entity is a going concern. They may conclude that:  The entity is a going concern  The entity is not a going concern  There is significant doubt as to whether the entity will be able to continue as a going concern or not. This assessment:  Is made when preparing the financial statements  Is based on all available information regarding the future (budgets, debt repayment schedules etc.)  Includes a review of the available information relating to at least 1 year from the end of the reporting date.

Entity is a going concern AFS prepared on GC basis Entity is not a going concern AFS not prepared on GC basis; must disclose the fact that they are not GC, reason why entity is not GC and basis used to prepare the AFS (used liquidation values) Significant doubt on going concern Entity is a going concern, but significant doubt; disclose the material uncertainties causing the doubt

Indicators that there is a going concern issue:  Entity is making a loss on the Statement of profit or loss and other comprehensive income;  Losses are made consistently over a number of years;  Liabilities exceed the assets;  Management does not have plans in place to turn the situation around;  Budgets indicate losses will be made in future

 Recognising elements (assets, liabilities, income, expenses & equity) when the definitions and recognition criteria are met. Refer to conceptual framework  Transactions and events are recorded in the period in which they occur rather than when the cash is received or paid.

 When is an item material? Will the users of the financial statements be influenced if the item is misstated or omitted? Materiality depends on the size & nature of the item  Accountancy involves a process of logical summarisation To summarise is to combine (aggregate) items that we believe are not material enough to be shown separately Transactions or events are aggregated into classes according to their nature or function

 Materiality is applied to classes of items and items are analysed based on their nature or function Each class of similar items that is material should be separately disclosed Each dissimilar item that is material should be segregated and separately disclosed Each dissimilar item that is immaterial may be aggregated/grouped with another class of items

Examples: The carrying amount of furniture is N$ and the carrying amount of plant is N$ The company’s materiality limit is N$ for items of property, plant and equipment. Explain whether or not the furniture and plant should be disclosed separately.

A company’s materiality limit is N$ and the total carrying amount of its:  Factory plant is N$ , including machine A, with a carrying amount of N$ ;  Office furniture is N$ ;  Office equipment is N$ Explain whether or not:  Machine A should be disclosed separately from the other machinery based on size  Office furniture should be separately disclosed from office equipment based on the carrying amount of each relative to the materiality limit  These assets should be aggregated on the face of the statement of financial position or in the notes

Notes to the annual financial statements:  Basis of preparation of financial statements  Information relevant to understanding the financial statements  Statement of compliance with IFRS  Summary of significant accounting policies  Sources of measurement uncertainty  Supporting information and sub-classifications for items presented in the SOFP, SOPL, SOCE & SOCF  Contingent liabilities and unrecognised contractual commitments  Non-financial disclosures

OTHER DISCLOSURES:  Country of incorporation  Address of registered office  Description of the nature of the entity’s operations and principle activities  Name of parent and ultimate parent company