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IND AS 1 Presentation of Financial Statements

This standard sets requirements for presenting general purpose financial statements. It requires an entity to present financial statements including a statement of financial position, statement of profit and loss, statement of changes in equity, and statement of cash flows. It specifies the basis of preparation, presentation requirements, and disclosure requirements for these financial statements.

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50 views6 pages

IND AS 1 Presentation of Financial Statements

This standard sets requirements for presenting general purpose financial statements. It requires an entity to present financial statements including a statement of financial position, statement of profit and loss, statement of changes in equity, and statement of cash flows. It specifies the basis of preparation, presentation requirements, and disclosure requirements for these financial statements.

Uploaded by

Pavan Kumar Purohit
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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IND AS 1

IND AS 1: PRESENTATION OF FINANCIAL STATEMENT


(Corresponding to IAS 1)
OBJECTIVE
Sets requirement for presentation of Financial Statement (FS), guidelines for their structure and minimum
requirement for their content.

SCOPE
♦ Standard is applied in preparing and presenting FS.
♦ Applies to all entities including those who present Consolidated Financial Statement and Separate
Financial Statement.
♦ Does not apply to the condensed interim financial statement prepared in accordance with Ind AS 34
(except general features Paras 15-35).

FINANCIAL STATEMENTS

Fair presentation and ♦ Faithful representation of effect of transaction.


compliance with IND- ♦ Explicit & unreserved statement of compliance with Ind AS.
AS: ♦ Inappropriate Accounting Policies cannot be rectified by
disclosure.

Going Concern: ♦ FS prepared on this basis unless otherwise intended by the management to
liquidate the entity or cease trading or there is no realistic alternative.

Accrual basis: ♦ Except cash flow item, all financial statement items must be prepared on
accrual basis.

Materiality and ♦ Each material item should be presented separately, and immaterial should be
aggregation: aggregated with the other items.
Offsetting: ♦ It is not allowed to offset asset and liabilities unless it is required by another
IND-AS or standard.

Frequency of reporting: ♦ Complete set of financial statement shall be presented annually and if not the
reason for longer or shorter period and fact that the statements are not fully
comparable must be disclosed.

Consistency: ♦ Financial statement must be prepared and classified as in the previous period
unless an Ind AS requires change or another presentation would be more
appropriate because of change in nature of entity's operation.

Comparative ♦ This information from previous period must be disclosed for all numbers in
information: financial statement and also narrative and descriptive information when
relevant.

STRUCTURE AND CONTENT


IDENTIFICATION OF FINANCIAL STATEMENT
♦ IND-AS applies to financial statement not to other information in the same published document.
Therefore, an entity must clearly distinguish the financial statement from other information and identify
following:
■ Name of the reporting entity
■ Whether financial statements are of an individual entity or a group of
entities
■ Period covered by the set of financial statement or notes.
■ Presentation currency
■ Level of rounding off used.
Current/Non-current distinction:
♦ Assets and liabilities can be presented by classifying in current and non-current items. OR
♦ Assets and liabilities can be presented in the order of liquidity if it is reliable or more
relevant.

Current Assets
♦ Expected to be realised in, or is intended for sale or consumption in the entity's normal operating
cycle

♦ Held primarily for trading


♦ Expected to be realised within 12 months
♦ Cash or cash equivalents (unless restricted from use for more than 12 months).
All other assets are required to be classified as non-current.

Current Liabilities
♦ Expected to be realised in, or is intended for sale or consumption in the entity's normal operating cycle
♦ Held primarily for trading
♦ Expected to be realised within 12 months
♦ The entity does not have an unconditional right to defer settlement of the liability for at least 12
months.
All other assets are required to be classified as non-current.
STATEMENT OF COMPREHENSIVE INCOME
♦ An entity shall present an analysis of expenses recognised in profit or loss using a classification based
on the nature of expense method
♦ Line Items within other comprehensive income are required to be characterised into two categories:
■ Those that could subsequently be reclassified to Profit or
Loss.
■ Those that cannot be reclassified to Profit or Loss.
♦ When items of income or expense are material, an entity shall disclose their nature and amount
separately.

Presentation of Profit or Loss


↓
Nature of expense method:

Revenue xx
Other income xx
Changes in inventories of finished goods and work in progress xx
Raw material and consumables used xx
Employee benefits expense xx
Depreciation and amortisation expense xx
Other expenses xx
Total expenses (xx)
Profits before tax xx

STATEMENT OF CHANGES IN EQUITY


♦ Information to be presented are:-
■ Total comprehensive income attributable to owners and NCI.
■ Effect of retrospective application or restatement.
■ Reconciliation between the amount of equity at beginning and end of period.
■ Disclosing the changes in equity arise from P/L, OCI, other owner's
transaction.

STATEMENT OF CASH FLOWS


Explained separately in IND AS 7.

NOTES
♦ General information required by Ind AS.

♦ Summary of significant accounting policies and judgments used in preparing FS.


♦ Disclose assumption made and sources of estimation used in preparing FS.
♦ Additional information useful to users understanding/decision making to be presented.
♦ Information that enables users to evaluate the entity's objectives, policies and processes for managing
capital.
♦ Required information about puttable financial instrument classified as equity.
♦ Dividend proposed and cumulative dividends not yet recognised.
♦ Other disclosure includes information of entity such as: legal form, address of registered office, nature
of operations or principal activities.

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