Deloitte-Roger Nasr

LACPA- IFRS SeminarsLACPA- IFRS Seminars

IAS 1IAS 1 Presentation Presentation of Financial of Financial StatementsStatements

Presented by Presented by – Roger Nasr, – Roger Nasr,

DeloitteDeloitte

Deloitte-Roger Nasr

IAS 1

Structure of the standardStructure of the standard

Objective and scopeObjective and scope Purpose of Financial statementsPurpose of Financial statements Components of Financial StatementsComponents of Financial Statements DefinitionsDefinitions Overall considerationsOverall considerations Structure and contentStructure and content

Deloitte-Roger Nasr

Objective and scopeObjective and scope

ObjectiveObjective to prescribe basis for presentation of “General to prescribe basis for presentation of “General

Purpose” financial statementsPurpose” financial statements in order to ensure comparabilityin order to ensure comparability

ScopeScope all general purpose financial statements all general purpose financial statements

prepared under IFRSprepared under IFRS• not condensed interim financial informationnot condensed interim financial information

IAS 1

Deloitte-Roger Nasr

Purpose of Financial statementsPurpose of Financial statements

Structured Presentation of Structured Presentation of Financial PositionFinancial Position Financial PerformanceFinancial Performance Results of Management Stewardship of the Results of Management Stewardship of the

resources entrusted to itresources entrusted to it

Deloitte-Roger Nasr

Components, complete set Components, complete set of financial statementsof financial statements

Balance sheetBalance sheet Income statementIncome statement Statement of changes in equityStatement of changes in equity Cash flow statementCash flow statement NotesNotes

Accounting policiesAccounting policies Explanatory notesExplanatory notes

IAS 1

Deloitte-Roger Nasr

DefinitionsDefinitions Impracticable requirementImpracticable requirement

Entity can not apply it after making every reasonable Entity can not apply it after making every reasonable effort effort

IFRSIFRS IFRS, IAS, IFRIC or SICIFRS, IAS, IFRIC or SIC

MaterialMaterial Omission or misstatement is material if it can Omission or misstatement is material if it can

influence the economic decision of users influence the economic decision of users

Deloitte-Roger Nasr

Overall considerationsOverall considerations

Fair presentationFair presentation achieved through application of IFRSachieved through application of IFRS disclose compliance with IFRSdisclose compliance with IFRS full compliance with IFRS requiredfull compliance with IFRS required application before effective dateapplication before effective date

• disclose that factdisclose that fact true and fair overridetrue and fair override

• only in extremely rare circumstancesonly in extremely rare circumstances

IAS 1

Deloitte-Roger Nasr

Overall considerationsOverall considerations

Fair presentation Fair presentation In extremely rare circumstances, where compliance In extremely rare circumstances, where compliance

with a Standard would be misleading so it would with a Standard would be misleading so it would conflict with objective set out in the frameworkconflict with objective set out in the framework

departure is permissible, if regulatory framework departure is permissible, if regulatory framework requires or does not prohibitrequires or does not prohibit

Specified disclosure requiredSpecified disclosure required

IAS 1

Deloitte-Roger Nasr

Overall considerationsOverall considerations

Going concernGoing concern• no intention to liquidate or to cease tradingno intention to liquidate or to cease trading• Disclose in case of Material uncertaintyDisclose in case of Material uncertainty

Accrual basis - transactions and eventsAccrual basis - transactions and events• are recognised when they occur, andare recognised when they occur, and• in the periods to which they relatein the periods to which they relate

ConsistencyConsistency• presentation & classification be retainedpresentation & classification be retained

Unless change in nature of operations necessitates another Unless change in nature of operations necessitates another presentationpresentation

A standard or an interpretation requires a changeA standard or an interpretation requires a change

IAS 1

Deloitte-Roger Nasr

Overall considerationsOverall considerations

Materiality & aggregationMateriality & aggregation• material material present separately present separately• immaterial immaterial aggregate with other items aggregate with other items

OffsettingOffsetting• Assets/Liabilities, and Income and expenses shall not be offset Assets/Liabilities, and Income and expenses shall not be offset

unless required or permittedunless required or permitted

Comparative informationComparative information• incl. narrative & descriptive informationincl. narrative & descriptive information

IAS 1

Deloitte-Roger Nasr

Structure and contentStructure and content

GeneralGeneral identification of financial statementsidentification of financial statements

• clearly distinguished from other informationclearly distinguished from other information reporting periodreporting period

• at least annually, at least annually, • to explain if longer or shorterto explain if longer or shorter

Information requiredInformation required• Name and change, if anyName and change, if any• Individual or group financialsIndividual or group financials• Period coveredPeriod covered• CurrencyCurrency• Level of roundingLevel of rounding

IAS 1

Deloitte-Roger Nasr

Structure and contentStructure and content

Balance sheetBalance sheet current vs. non-current distinctioncurrent vs. non-current distinction or, classify based on liquidity if more or, classify based on liquidity if more

relevantrelevant obligatory line items on face of B/Sobligatory line items on face of B/S disclosure required on face or in notesdisclosure required on face or in notes

• relevant sub-classifications of items aboverelevant sub-classifications of items above• information on share capital and reservesinformation on share capital and reserves

IAS 1

Deloitte-Roger Nasr

Minimum Items on face of Balance Sheet Minimum Items on face of Balance Sheet Property, Plant and EquipmentProperty, Plant and Equipment Investment PropertyInvestment Property Intangible AssetsIntangible Assets Financial AssetsFinancial Assets Investments Accounted for using the equity methodInvestments Accounted for using the equity method Biological AssetsBiological Assets InventoriesInventories Trade and Other receivablesTrade and Other receivables Cash and Cash EquivalentsCash and Cash Equivalents Trade and Other PayablesTrade and Other Payables ProvisionsProvisions Financial liabilitiesFinancial liabilities Liabilities and Assets for current taxLiabilities and Assets for current tax Deferred tax assets and liabilitiesDeferred tax assets and liabilities Minority interest within equityMinority interest within equity Issued Capital and reserves attributable to equity holders of the parentIssued Capital and reserves attributable to equity holders of the parent

Structure and contentStructure and content

Deloitte-Roger Nasr

Structure and contentStructure and content

Current vs. non-current AssetsCurrent vs. non-current Assets Realised/settledRealised/settled in the normal course of in the normal course of

operating cycle or within 12 month of the operating cycle or within 12 month of the balance sheet datebalance sheet date

Held primarily for the purpose of being tradedHeld primarily for the purpose of being traded Unrestricted cash or a cash equivalentUnrestricted cash or a cash equivalent All other assets are non-CurrentAll other assets are non-Current

IAS 1

Deloitte-Roger Nasr

Structure and contentStructure and content Current Vs. non Current LiabilitiesCurrent Vs. non Current Liabilities

Settled in the normal course of operating cycle or due to be Settled in the normal course of operating cycle or due to be settled within 12 month of the balance sheet datesettled within 12 month of the balance sheet date

Held primarily for the purpose of being tradedHeld primarily for the purpose of being traded No unconditional right to defer settlement for at least 12 monthsNo unconditional right to defer settlement for at least 12 months post-balance sheet events (refinancing, correction of defaults) post-balance sheet events (refinancing, correction of defaults)

do not affect current vs. non-current classificationdo not affect current vs. non-current classification All other Liabilities are non-CurrentAll other Liabilities are non-Current

Deloitte-Roger Nasr

Structure and contentStructure and content

Income statementIncome statement obligatory line items on face of I/Sobligatory line items on face of I/S To show as allocation To show as allocation

• Profit or loss attributable to Minority InterestProfit or loss attributable to Minority Interest• Profit or loss attributable to equity holders of the parentProfit or loss attributable to equity holders of the parent

expenses analysed on basis ofexpenses analysed on basis of• naturenature• FunctionFunction

Dividends should be disclosed plus per share (or in statement Dividends should be disclosed plus per share (or in statement of changes in equityof changes in equity

IAS 1

Deloitte-Roger Nasr

Structure and contentStructure and content Minimum Items on the face of the income statementMinimum Items on the face of the income statement

RevenueRevenue Finance CostsFinance Costs Share of profit/loss of associates accounted for at the equity methodShare of profit/loss of associates accounted for at the equity method Tax expenseTax expense Sum of profit or loss on discontinued operations plus gain or loss on the Sum of profit or loss on discontinued operations plus gain or loss on the

disposal of discontinued operations assetsdisposal of discontinued operations assets Profit or loss Profit or loss No operating income/lossNo operating income/loss No extraordinary itemsNo extraordinary items

Deloitte-Roger Nasr

Structure and contentStructure and content

Income Statement presentationIncome Statement presentation

classification based on natureclassification based on nature• salaries, depreciation, transport, etcsalaries, depreciation, transport, etc

classification based on functionclassification based on function• cost of sales, distribution, administrationcost of sales, distribution, administration

IAS 1

Deloitte-Roger Nasr

Structure and contentStructure and content

Statement of changes in equityStatement of changes in equity separate component of financial statementsseparate component of financial statements On the faceOn the face

• (a) Profit or loss for the period(a) Profit or loss for the period• (b) gains and losses not reflected in income statement(b) gains and losses not reflected in income statement• (a)+(b) attributable to each of Minority Interest and equity holders (a)+(b) attributable to each of Minority Interest and equity holders

of the parentof the parent also in statement or in the notesalso in statement or in the notes

• capital transactions with ownerscapital transactions with owners• movements in accumulated profitmovements in accumulated profit• movements in capital and reservesmovements in capital and reserves

IAS 1

Deloitte-Roger Nasr

Structure and contentStructure and content

Role of statement of changes in equityRole of statement of changes in equity broader performance indicatorbroader performance indicator ‘‘total recognised gains and losses’ ortotal recognised gains and losses’ or ‘‘comprehensive income’comprehensive income’

Cash flow statement in accordance with Cash flow statement in accordance with IAS 7IAS 7

IAS 1

Deloitte-Roger Nasr

Structure and contentStructure and content

Notes to the financial statementsNotes to the financial statements basis of preparation of financial statementsbasis of preparation of financial statements accounting policies selectedaccounting policies selected additional disclosure to present fairlyadditional disclosure to present fairly other sundry disclosuresother sundry disclosures

• e.g. domicile, legal form, country of incorporatione.g. domicile, legal form, country of incorporation

IAS 1

Deloitte-Roger Nasr

Case study 01Case study 01

Income statement presentationIncome statement presentation

IAS 1

Deloitte-Roger Nasr

Classification by functionClassification by function

Deloitte-Roger Nasr