Presentation requirement as per AASB 101

Running head: FINANCIAL ACCOUNTING
Financial accounting
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1FINANCIAL ACCOUNTING
Table of Contents
Presentation requirement as per AASB 101....................................................................................2
Definition and recognition criteria as per conceptual framework...................................................4
Reference.........................................................................................................................................7

2FINANCIAL ACCOUNTING
Presentation requirement as per AASB 101
AASB 101 requires an entity to fairly present the financial statements regarding its
financial performance, financial position and regarding the cash flow if the company.
Requirement for fair representation is faithful representation of the impact of the transactions,
other condition and events as per the definition as well as the recognition criteria for the
expenses, revenues, assets and liabilities that is set out under framework. Further, application of
the AAS with the additional disclosures wherever required is assumed to be resulted into the
fairly presented financial statement (Aasb.gov.au, 2019). Fair representation also requires that an
entity (i) must select as well as apply the accounting policies as per the requirements of AASB
108 regarding accounting policies, changes in the accounting estimates and errors (ii) present the
information regarding policies in the way that delivers reliable, relevant, understandable and
comparable information (iii) providing the additional disclosures while the compliance with
particular requirement under AAS is not sufficient for enabling the users in understanding the
impact of any specific transactions, other conditions and events under the financial performance
as well as financial position of the entity (Aasb.gov.au, 2019). The entity is not able to rectify the
inappropriate accounting policies through disclosures of accounting policies used or through the
explanatory materials or notes. If under any exceptional and rare condition the management is in
the view that the compliance with AAS will be significantly misleading and will have a conflict
with objective of financial statements required by the framework, the entity must depart from the
requirement (Hodgson & Russell, 2014).
As per Para 21 of AASB 101, while any entity departs itself from any requirement of
AAS in prior period and the same has an impact on the recognized amount under the financial