International Accounting Standard 1: Presentation of Financial Statements or IAS 1 is an

international financial reporting standard International Financial Reporting Standards, commonly called IFRS, are accounting standards issued by the IFRS Foundation and the International Accounting Standards Board (IASB). They constitute a standardised way of describing the company's fina ...

adopted by the

International Accounting Standards Board (IASB) The International Accounting Standards Board (IASB) is the independent accounting standard-setting body of the IFRS Foundation. The IASB was founded on April 1, 2001, as the successor to the International Accounting Standards Committee (IASC). It ...

.IFRS Foundation, 2012
International Accounting Standard 1: Presentation of Financial Statements
Retrieved on April 20, 2012. It lays out the guidelines for the presentation of financial statementsICAEW, 2012
IAS 1: Presentation of financial statements
Retrieved on April 20, 2012. and sets out minimum requirements of their content; it is applicable to all general purpose

financial statements Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to un ...

that are based on International Financial Reporting Standards (IFRS). IAS 1 was originally issued by the

International Accounting Standards Committee The International Accounting Standards Committee (IASC) was founded in June 1973 in London at the initiative of Sir Henry Benson, former president of the Institute of Chartered Accountants in England and Wales. The IASC was created by national acc ...

in 1997, superseding three standards on disclosure and presentation requirements, and was the first comprehensive accounting standard to deal with the presentation of financial standards.Kirk, R.J
The Key Issues in IAS1
Retrieved on April 20, 2012. It was adopted by the IASB in 2001, and as of 2012 the standard was last amended in June 2011; these amendments are effective from July 1, 2012.Deloitte Global Services Limited, 2012
IAS 1 — Presentation of Financial Statements
Retrieved on April 20, 2012.

Overview

Purpose and Features

IAS 1 sets out the purpose of financial statements as the provision of useful information on the financial position, financial performance and

cash flows A cash flow is a real or virtual movement of money: *a cash flow in its narrow sense is a payment (in a currency), especially from one central bank account to another; the term 'cash flow' is mostly used to describe payments that are expected ...

of an entity, and categorizes the information provided into

assets In financial accounting, an asset is any resource owned or controlled by a business or an economic entity. It is anything (tangible or intangible) that can be used to produce positive economic value. Assets represent value of ownership that can ...

, liabilities,

income Income is the consumption and saving opportunity gained by an entity within a specified timeframe, which is generally expressed in monetary terms. Income is difficult to define conceptually and the definition may be different across fields. Fo ...

and

expenses An expense is an item requiring an outflow of money, or any form of fortune in general, to another person or group as payment for an item, service, or other category of costs. For a tenant, rent is an expense. For students or parents, tuition is a ...

, contributions by and distribution to owners, and cash flows. It lists the set of statements, for example the statement of financial position and statement of profit and loss, that together comprise the financial statements. IAS 1 also elaborates on the following features of the financial statements: * fairly presented and compliant with IFRSs; * prepared on a

going concern A going concern is a business that is assumed will meet its financial obligations when they become due. It functions without the threat of liquidation for the foreseeable future, which is usually regarded as at least the next 12 months or the spec ...

basis; * prepared using the

accrual basis Accrual (''accumulation'') of something is, in finance, the adding together of interest or different investments over a period of time. Accruals in accounting For example, a company delivers a product to a customer who will pay for it 30 days l ...

of accounting; * has material classes presented separately; * does not offset assets and liabilities; * prepared at least annually; * includes comparison with previous periods; and * presented consistently across periods

Structure and Content

IAS 1 lists the line items that, as a minimum, are to be included. The standard lists requirements regarding the classification of information, such as requiring that current liabilities be listed separately, and details on when to classify a liability as current as opposed to non-current. It also sets out requirements regarding the

notes to the financial statements Financial statements (or financial reports) are formal records of the financial activities and position of a business, person, or other entity. Relevant financial information is presented in a structured manner and in a form which is easy to un ...

, including disclosures on accounting policy and information on assumptions used.

Recent amendments

IAS 1 was amended in 2007 to reflect a change in terminology that also affected other accounting standards. The changes include the following. The IASB amended the statement again in 2011, adding the requirement that items in other comprehensive income be grouped based on their potential reclassifiability to profit and loss, among several other changes. These amendments, when previously proposed, led to the Institute of Chartered Accountants in England and Wales advising that the approach of making "small changes to one standard" can have negative effects.Reed K, 2010
IASB must hold off tweaking existing standards, says ICAEW
Retrieved on April 22, 2012.

References

{{International Financial Reporting Standards IAS 01 Financial statements