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Pas 1

PAS 1 provides guidelines for the presentation of financial statements to ensure comparability and a true view of a company's financial position. It outlines the required components, including the Statement of Financial Position and Statement of Profit or Loss, and emphasizes principles such as fair presentation and consistency. Additionally, it details the classification of current and non-current assets and liabilities, as well as disclosure requirements for accounting policies and estimates.

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18 views2 pages

Pas 1

PAS 1 provides guidelines for the presentation of financial statements to ensure comparability and a true view of a company's financial position. It outlines the required components, including the Statement of Financial Position and Statement of Profit or Loss, and emphasizes principles such as fair presentation and consistency. Additionally, it details the classification of current and non-current assets and liabilities, as well as disclosure requirements for accounting policies and estimates.

Uploaded by

memo85536
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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PAS 1 – Presentation of Financial Statements

1. Objective of PAS 1

 Sets guidelines on how financial statements should be presented.

 Ensures comparability across different companies and reporting periods.

 Provides a true and fair view of a company's financial position and performance.

2. Components of Financial Statements

PAS 1 requires the following complete set of financial statements:

1. Statement of Financial Position (Balance Sheet) – Shows a company’s assets, liabilities, and
equity at a specific date.

2. Statement of Profit or Loss and Other Comprehensive Income – Reports income, expenses,
profit/loss, and other comprehensive income.

3. Statement of Changes in Equity – Explains movements in equity (e.g., share capital, retained
earnings).

4. Statement of Cash Flows – Shows cash inflows and outflows from operating, investing, and
financing activities.

5. Notes to the Financial Statements – Provides additional information and accounting policies.

3. General Features of Financial Statements

PAS 1 requires financial statements to follow these principles:

 Fair presentation – Reflects economic reality.

 Going concern – Assumes the company will continue operating.

 Accrual basis – Recognizes income and expenses when they occur, not when cash is
received/paid.

 Materiality and aggregation – Significant items should be reported separately.

 Offsetting – Assets and liabilities, or income and expenses, should not be offset unless required
by PFRS.

 Comparative information – Previous period’s figures must be presented.

 Consistency – Same accounting policies should be applied across periods.

4. Current vs. Non-Current Classification

 Current assets: Expected to be used or converted into cash within one year (e.g., cash,
inventory, accounts receivable).

 Non-current assets: Long-term assets used for more than one year (e.g., property, equipment).
 Current liabilities: Due within one year (e.g., accounts payable, short-term loans).

 Non-current liabilities: Due beyond one year (e.g., long-term loans, bonds payable).

5. Presentation of Profit or Loss and Other Comprehensive Income (OCI)

 Profit or loss: Revenue minus expenses (e.g., sales, salaries, rent).

 Other Comprehensive Income (OCI): Gains/losses not included in profit or loss (e.g., foreign
currency translation, revaluation gains).

 Companies may present profit or loss and OCI in one or two separate statements.

6. Disclosure Requirements

The notes to the financial statements must include:

 Accounting policies used.

 Judgments and estimates that affect financial statements.

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