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PRESENTATION OF FINANCIAL
STATEMENTS (lAS 1)
1.
INTRODUCTION
lAS I provides guidelines on the presentation of the "general purpose financial statements,"
thereby ensuring comparability both with the entity's financial statements of previous periods and
with those of other entities. It provides overall requirements for the presentati on of financial state–
ments, guidance on their structure, and the minimum requirements for their content.
It
also pre–
scribes the components of the financial statements that together would be considered a comp lete set
of financial statements.
2. SCOPE
The requirement s of lAS I are to be applied to all "general purpose financial statements" that have
been prepared and presented in accordance with Internati onal Financial Reporting Standards
(IFRS). "General purpose financial statements" are those intended to meet the needs of users who
are not in a position to demand reports that are tailored according to their informati on needs. lAS I
is not applicable to condensed interim financial statements prepared according to lAS 34. Addi–
tional requirements for banks and similar financial institutions are contained in lAS 30,
Disclosures
in the Financial Statements of Banks and Similar Financial Institutions.
Modification of the pre–
sentation requirements of the Standard may be required by nonprofit entities and those entities
whose share capital is not equity.
3. DEFINITIONS OF KEY TERMS
Impracticable. Applying a requirement becomes impract icable when the entit y cannot apply
a requirement despite all reasonable efforts to do so.
In tern a tional Financial Reporting Sta nda r ds (IFRS). Standards and interpretations adopted
by the International Accounting Standards Board (IASB). They include
(a) International Financial Reporting Standards
(b) International Accounting Standards
(c) Interpretations originated by the International Financial Reporting Interpretations
Committee (lFRIC) or the former Standing Interpretations Committee (SIC)
Material. An item is deemed to be material if its omission or misstatement would influence
the economic decisions of a user taken on the basis of the financia l statements. Materiality is
determi ned based on the item' s nature, size, and/or the surrounding circumstances.
Notes to financial stateme nts . A collection of information providin g descriptions and disag–
gregated information relating
to
items included in the financial statements (i.e., balance sheet,
income statement, statement of changes in equity, and cash flow statement), as well as those
that do not appear in the financial statements but are disclosed due to requirements of IFRS.
Pr actical Insight
"Materiality" as a concept has been the subject of debate for years yet there are no clear-cut
parameters to compu te materiality. What would normally be expected to influence one per–
son's viewpoint may not necessarily influence another person' s economic dec isions based on
the financial statements. Furthermore, materiality is not only "quantitative" (i.e., measured in
terms of numbers) but also "qualitative" (because it depends not only on the "size" of the item