The IAS 1 Standard and its content

The IAS 1 standard contains the framework for all IFRS financial reporting. This standard sets out the general requirements for the presentation of financial statements, guidelines for the particular structure and also the minimum requirements for their content. The rules of IAS 1 cover the content and presentation of financial statements of entities that wish to prepare corresponding financial statements in accordance with International Financial Reporting Standards (IFRS).

Important definitions of IAS 1

IFRS as defined in IAS 1 include all regulations of the International Accounting Standards Board (IASB) such as the so called IFRS International Financial Reporting Standards, International Accounting Standards (IAS), IFRIC Interpretations and SIC Interpretations. Financial statements are intended to satisfy users who are not in a position to require an entity to publish reports tailored to their particular information needs. Profit or loss is the total of all expenses and income recognised in profit or loss. Other comprehensive income includes expenses and income that are not recognised in profit or loss. An entity’s comprehensive income is the change in equity due to profit or loss and other comprehensive income. The notes contain additional information in the form of verbal descriptions or breakdowns of the components of the financial statements.

Content of the financial statement

Pursuant to IAS 1.10, a complete set of financial statements shall include at the end of a period a statement of financial position, for the financial year, a statement of comprehensive income, a statement of changes in equity and a statement of where the money went, as well as notes to the financial statements and, in the case of a retrospective amendment, correction or reclassification of items in the financial statements, a statement of financial position as at the beginning of the earliest comparative period. In accordance with IAS 1.10A, the statement of comprehensive income may be presented in an integrated format, i.e. profit or loss and other comprehensive income are presented together, or separately. In this case, profit or loss and other comprehensive income are to be presented separately from each other, but immediately one after the other. In preparing the financial statements, the company has to observe essential features. According to IAS 1.15, the financial statements must present a true and fair view of the financial performance, the financial position, and cash flows of an Organization. If the financial statements are prepared in accordance with the criteria and definition of the IFRS framework and the regulations of the IFRS, it is assumed that the financial statements reflect the actual circumstances. Deviations from these regulations must be disclosed and justified (IAS 1.19 / IAS 1.20). In addition, an entity shall disclose in its financial statements information about proposed or approved distributions (IAS 1.137) and general information about the entity’s registered office, legal form, business activities, name of the parent and parent group and information about its useful life, if any (IAS 1.138). If you have any questions about IAS 1 or any other IAS, IFRS, SIC or IFRIC, please contact the IFRS experts annualreporting.info”>annualreporting.info.