CFAS

Second Semester| Finals

PAS 1 PRESENTATION OF FINANCIAL ACCRUAL BASIS OF ACCOUNTING

STATEMENTS

SCOPE PAS 1.27

PAS 1 requires that an entity prepare its
PAS 1.2
financial statements, except for cash flow information,
PAS 1 applies to all general purpose financial
using the accrual basis of accounting (PAS 1.27).
statements that are prepared and presented in
CONSISTENCY OF PRESENTATION
accordance with PFRSs (PAS 1.2).

PAS 1.45
PAS 1.7
The presentation and classification of items in
General purpose financial statements are those
the financial statements shall be retained from one
intended to serve users who are not in a position to
period to the next unless a change is justified by either a
require financial reports tailored to their particular
change in circumstances or a requirement of a new
information needs (PAS 1.7).
PFRS (PAS 1.45).
FAIR PRESENTATION AND COMPLIANCE WITH
MATERIALITY AND AGGREGATION
PFRSs

PAS 1.29
PAS 1.15
Each material class of similar items must be
The financial statements must "present fairly the
presented separately in the financial statements.
financial position, financial performance, and cash flows
Dissimilar items may be aggregated only if they are
of an entity. Fair presentation requires the faithful
individually immaterial (PAS 1.29).
representation of the effects of transactions, events, and
conditions in accordance wh the definitions and
OFFSETTING
recognition criteria for assets, liabilities, income, and
expenses set out in the framework. The application of
PFRSs, with additional disclosure when necessary, is PAS 1.32
presumed to result in financial statements that achieve a
Assets and liabilities, income and expenses,
fair presentation (PAS 1.15).
may not be offset unless required or permitted by a
PFRS (PAS 1.32).
GOING CONCERN
COMPARATIVE INFORMATION
PAS 1.25
PAS 1 requires management to assess an PAS 1.38
entity's ability to continue as a going concern. If
PAS 1 requires that comparative information be
management has significant concerns about the entity's
disclosed in respect of the previous period for all
ability to continue as a going concern, the uncertainties
amounts reported in the financial statements, both in the
must be disclosed. If management concludes that the
financial statements and in the notes, unless another
entity is not a going concern, the financial statements
standard requires otherwisė. Comparative information is
should not be prepared on a going concern basis, in
provided for narrative and descriptive purposes, where it
which case PAS 1 requires a series of disclosures (PAS
is relevant to understanding the financial statements of
1.25).
the current period (PAS 1.38).

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PAS 1.38A All other assets are non-current (PAS 1.66).
An entity is required to present at least two of
each of the primary financial statements (PAS 1.38A). PAS 1.69
Current liabilities are those (PAS 1.69):
STRUCTURE AND CONTENT OF FINANCIAL
expected to be settled within the entity's normal
STATEMENTS IN GENERAL
operating cycle; held for the purpose of trading: due to
be settled within 12 months; and for which the entity
PAS 1.49-51 does not have the right at the end of the reporting period
PAS 1 requires an entity to clearly identify (PAS to defer settlement beyond 12 months.
1.49-51): the financial statements, which must be Other liabilities are non-current.
distinguished from other information in a published
document, each financial statement, and the notes to the PAS 1.73
financial statements.
When a long-term debt is expected to be
REPORTING PERIOD
refinanced under an existing loan facility and the entity
has the discretion to do so, the debt is classified as non-
PAS 1.36 current, even if the liability would otherwise be due within
There is a presumption that financial statements 12 months (PAS 1.73).
will be prepared at least annually. If the annual reporting
period changes and financial statements are prepared
for a different period, the entity must disclose the reason
for the change and state that amounts are not entirely PAS 1.76B
comparable (PAS 1.36).
Settlement by the issue of equity instruments
does not impact classification (PAS 1.76B).
CURRENT AND NONCURRENT CLASSIFICATION

MINIMUM CONTENT LINE ITEMS

PAS 1.60
An entity must normally present a classified ASSETS LIABILITIES AND
statement of financial position separating current and EQUITY
noncurrent assets and liabilities, unless presentation Cash and cash Financial liabilities
based on liquidity provides information that is reliable
equivalents (Chapter VIl) (Chapter VII)
(PAS 1.60).
Financial assets (Chapter Trade and other payables
PAS 1.61 VI) (Chapter VII)
In either case, if an asset (liability) category
Trade and other Current tax liabilities
combines amounts that will be received (settled) after 12
months with assets (liabilities) that will be received receivables (Chapter VIl) (Chapter XIV)
(settled) within 12 months, note disclosure that
Current tax assets Provisions (Chapter XI)
separates the longer-term amounts from the 12-month
amounts is required (PAS 1.61). (Chapter XIV)

Inventories (Chapter VIll) Non-current assets held

PAS 1.66 for sale and discontinued
Current assets are assets that are (PAS 1.66): operations (Chapter IX)
expected to be realized in the entity's normal operating
cycle; held primarily for the purpose of trading; expected Biological assets Deferred tax liabilities
to be realized within 12 months after the reporting (Chapter VIll) (Chapter XIV)
period; and cash and cash equivalents (unless
restricted). Non-current assets held Issued capital and

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 SHARE CAPITAL AND RESERVES
for sale and discontinued reserves attributable to
operations (Chapter IX) owners of the parent
(Chapter X) PAS 1.79
Regarding issued share capital and reserves,
Investments accounted Non-controlling interests the following disclosures are required (PAS 1.79):
for using the equity (Chapter X) ● numbers of shares authorized, issued, and fully
method (Chapter X) paid and issued but not fully paid;
● par value (or that shares do not have a par
Property, plant, and value);
equipment (Chapter IX) ● reconciliation of the number of shares
outstanding at the beginning and the end of the
Investment property period: description of rights, preferences, and
(Chapter IX) restrictions;
● treasury shares, including shares held by
Intangible assets subsidiaries and associates;
(Chapter IX) ● shares reserved for issuance under options and
contracts; and description of the nature and
Deferred tax assets purpose of each reserve within equity.
(Chapter XIV)
STATEMENT OF CHANGES IN EQUITY

PAS 1.106
PAS 1 requires an entity to present a separate
PROFIT OR LOSS statement of changes in equity. The statement must
show (PAS 1.106):
Revenue (Chapter XVIII)
(a) total comprehensive income for the period,
showing separately amounts attributable to
Gains and losses arising from the derecognition of
owners of the parent and to non- controlling
financial assets at amortized cost (Chapter VII)
interests;
Finance costs (Chapters VIl and IX) (b) effects of any retrospective application of
accounting policies of restatements made in
Share of the profit or loss of associates and joint accordance with PAS 8, separately for each
ventures accounted for using the equity method component of other comprehensive income; and
(Chapter X) (c) reconciliations between the carrying amounts at
the beginning and the end of the period for each
Tax expense (Chapter XI) component of equity, separately disclosing: (i)
profit or loss, (ii) other comprehensive income,
Post-tax profit/gain or loss of operations or assets in and (iii) transactions with owners, showing
accordance with PFRS 5 (non-current assets held for separately contributions by and distributions to
sale and discontinued operations) (Chapter IX) owners and changes in ownership interests in
subsidiaries that do not result in a loss of
control.
PAS 1.55
Additional line items, headings, and subtotals NOTES TO THE FINANCIAL STATEMENTS
may be needed to fairly present the entity’s financial
position (PAS 1.5) PAS 1.112
The notes must (PAS 1.112):
● present information about the basis of
preparation of the financial statements and the
specific accounting policies used;
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 ● disclose any information required by PFRSs that ● whether the entity has complied with any
is not presented elsewhere in the financial external capital requirements: and
statements; and ● if it has not complied, the consequences of such
● provide additional information that is not non-compliance.
presented elsewhere in the financial statements
but is relevant to an understanding of any of
them.

OTHER DISCLOSURES IN THE NOTES

PAS 1.122
An entity must disclose, in the summary of
significant accounting policies or in other notes, the
judgments, apart from those involving estimations, that
management has made in the process of applying the
entity's accounting policies that have the most significant
effect on the amounts recognized in the financial
statements (PAS 1.122).

DIVIDENDS

PAS 1.137
In addition to the distribution's information in the
statement of changes in equity, the following must be
disclosed in the notes (PAS 1.137):
● The amount of dividends proposed or declared
before the financial statements were authorized
for issue but were not recognized as a
distribution to owners during the period and the
related amount per share.
● The amount of any cumulative preference
dividends not recognized

CAPITAL DISCLOSURES

PAS 1.134 & PAS 1.135

An entity discloses information about its
objectives, policies, and processes for managing capital
(PAS 1.134). To comply with this, the disclosures include
(PAS 1.135):
● qualitative information about the entity's
objectives, policies, and processes for managing
capital, including a description of capital it
manages, nature of external capital
requirements, if any, and how it is meeting its
objectives;
● quantitative data about what the entity regards
as capital;
● changes from one period to another;