IAS 1 2007Presentation of Financial Statements LECTURE 4 Part 1
IAS 1 2007 • Issued in September 2007 • Includes subsequent amendments up to 30/11/20x8 • Effective from 1/1/20x9 Developments 1974 – IAS 1 Disclosure of Accounting Policies 9/1997 – IAS 1 Presentation of F/S (Replace IAS 1 1974, IAS 5 Info. To be disclosed in F/S , IAS 13 Presentation of Currents Assets and Liabilities) 2003 - IASB issued Revised IAS 1 2005 - IASB Issued Amendment to IAS 1 – Capital Disclosure PLEASE READ IAS 1 2007 download from www.iasb.org
Reasons for revising IAS 1 2003 • Main obj: To aggregate information in the fin stat on the basis of shared characteristics • IASB considered it useful to SEPARATEchanges in equity (Net Assets) of an entity during a period arising from transaction with owners in their capacity as owners FROM other changes in equity • All Owner changes in equity presented in Statement of Changes in Equity, • Separate Stat. from Non Owner Changes in Equity - Comprehensive Income To aggregate items with shared characteristics and separate otherwise
Main Features of IAS 1 2007 • Presentation of Owner Changes in Equity and of Comprehensive Income • Non-Owner Changes in Equity to be dealt in Comprehensive Income • Components of Comprehensive Income not permitted to be presented in Statement of Changes in Equity • To present a Statement of Financial Position (previously known as Balance Sheet) beginning of the earliest comparative period in a complete set of financial statement when the entity applies an accounting policy retrospectively or make retrospective statement (IAS 8) or when reclassifies items in the f/s
Continue • To disclose reclassification adj (to provide users with information to assess the effect of such reclassification on profit loss) and Income tax relating to each component of comprehensive income. • Reclassification Adj. are amounts reclassified to P&L in the current period that were previously recognised in other comprehensive income. • Presentation of dividends recognised as dist. to owners and related amts per share in stat of changes in eq. or in the notes bec dividends are dist. to owners, reflect all owner changes in eq.
Changes from Previous Requirements • Bal. Sheet – Change to Stat of Financial Position • Cash Flow – Stat of Cash Flow These new titles reflect > closely the functions of the statement • Entity to disclose comparative info. in respect of previous period i.e. min 2 of each of the statements and related notes • Items not recog. in P&L to be presented in Stat of Changes in Eq. ; Stat of Changes in Eq will comprise of profit/loss, other items of income or expenses, effect of changes in actg policies and correction of errors as Statement of Recognised Income and Expense • Income and Expenses to be presented as one Stat, Statement of Comprehensive Income or in 2 Statements, A separate Income Statement and A Statement of Comprehensive Income
Comprehensive Income • Other comprehensive income comprises of items of income and expense (including reclasification adj) that are not recog in P&L as required or permitted by IFRS (PURPOSE: To combat Off-Balance Sheet records) Components of Other Comprehensive Income includes: • Changes in Revaluation Surplus • Actuarial Gains and Loss on Defined Benefit Plans • Gains and Losses from Translations of Foreign Operations • Gains and Losses on re-measuring available for sale financial assets • The effective portion of gains and losses on hedging instr. Total Comprehensive Income - All components of Profit & Loss and Other Comprehensive Income
(1) Bal Sheet – Stat of Finl Position (2) Cash Flow – Stat of Cash Flow (3) Statement of Comprehensive Y or Separate Income Statement (4) Changes in Equity bet Owner: – Stat of Changes in Equity (5) Other Comprehensive Income - Off Balance Sheet Items - Non Owner Changes in Equity Take Home Notes