University Report: Comprehensive Summary of IAS 1 Financial Statements

This report provides a comprehensive summary of IAS 1, also known as International Accounting Standard 1: Presentation of Financial Statements. Adopted by the International Accounting Standards Board (IASB), IAS 1 establishes guidelines for financial statement presentation to ensure economic activities are accurately measured. The report discusses the standard's purpose, which is to offer helpful information on financial positions, cash flow, and financial performance of entities based on income, assets, liabilities, and expenses. It covers the key characteristics of IAS 1, including accrual accounting, annual preparation, separate presentation of material classes, and fair presentation, compliant with IFRSs. The report also addresses the items included in IAS 1, such as the statement of financial position, statement of profit and loss, and requirements for financial statement notes. Additionally, it highlights the amendments made to IAS 1, including changes in terminology and the addition of requirements for comprehensive income. It also references the Conceptual Framework, which aids financial experts in preparing financial statements. Finally, the report concludes that IAS 1 is a significant financial standard, with a focus on the management's assessment of the entity's going concern status, and the importance of presentation and classification of financial items.

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The purpose of the following paper is to provide a proper summary for the IAS 1. The
abbreviation IAS 1 stands for International Accounting Standard 1: Presentation of the
Financial Statements. This standard had been adopted by the International Accounting Standards
Board (IASB) (Iasplus.co. 2019). Its purpose is to provide the proper international financial
reporting standard so the economic activities of the organizations can be measured properly. In
this report, all the guidelines have been discussed on the financial statements in an international
basis. All the general financial statements are parts of this report that relies on the International
Financial Reporting Standards (IFRS).
This IAS 1 had been primarily put into the proper practice in the in the year 1997 by the
International Accounting Standards Committee (Iasplus.co. 2019). This is believed to be the very
first accounting standard that would deal with the financial standards to be precise. It was also
the first accounting standard that would focus on the three disclosure standards and requirements
for financial statements. The International Accounting Standards Board (IASB) had adopted this
measure in the year 2001. Some amendments had been made on June in the year 2011.
Therefore, the newly amended version had come into effect from 1st July in 2012.
In order to provide an overall summary of the IAS 1, one must have a proper knowledge
of its purpose and characteristics. Thus one can understand the reason as to why this IAS 1 had
been designed (Iasplus.co. 2019). The main purpose of the IAS 1 was to have a view on the
financial statements to provide the all helpful information on the things like the cash flow,
financial positions and financial performances of the entities. All the categories are based on the
income, assets, liabilities and expenses (Schaltegger & Burritt, 2017). These categories are
formulated properly indeed. All the sets of the statements are listed in it. The contribution by the

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owners and its distributions are also enlisted in this. The cash flows are included in the list as
well (Iasplus.co. 2019).
The financial statements comprise of the statements of the financial position and the
statements of profit and loss. In the IAS 1, the financial experts have also found out some of the
characteristics than the previously mentioned ones (Iasplus.co. 2019). IAS 1 has been comprised
after the preparation of the accrual basis of accounting. The list should be prepared on an annual
basis indeed. The material classes should also be presented in a separate manner. This list of IAS
1 should be prepared on the going concern basis. This list must always strictly be presented in a
fair manner. Apart from that, it should always be compliant with the IFRSs. The IAS 1 should
not overcast the assets and liabilities (Iasplus.co. 2019). Comparisons should be based on the
earlier periods. Also, it should be properly presented across the different periods as well.
In the IAS 1, many items are included. In the standard list of requirements, the
information is classified properly and it helps the practitioners. There is a probability that the
current liabilities should be listed in a spate manner (Iasplus.co. 2019). In this list, the important
classifications should also be done when the differences between the current and non-current
liabilities could be identified (Hoyle, Schaefer & Doupnik, 2015). Therefore, it is a very
complicated process and it will need greater concentration for the financial experts to count on.
Some requirements will also have to be followed to implement the IAS 1 (Iasplus.co. 2019). This
includes the important notes in the financial statements. This includes the crucial information on
the assumptions and accounting policy disclosures.
The amendments in the IAS 1 had been made in the year 2007. Many changes had been
made in the terminology (Hoyle, Schaefer & Doupnik, 2015). Therefore, it gave way for the

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changes in the other accounting standards across the financial industry as well. Before the
amendment, the terminology used was balance sheet and it became statement of financial
position after the statement. Similarly, the terms cash flow statement and income statement went
through changes as well (Nobes, 2014). Cash flow statement became statement of cash flows and
income statement became the statement of comprehensive income. These changes were primarily
very tough to comprehend but it became legible at the future periods of time. However, this IAS
1 had been amended in the year 2011 as well. Another requirement had been added in this list as
well. The comprehensive income will be put into the group that will be based upon their feature
to be re-classified into profit and loss (Schaltegger & Burritt, 2017). Many other changes had
been seen in this context as well. These amendments or changes had been proposed in the earlier
times as well. That times the Institute of the Chartered Accountants of England and Wales
viewed this thing as a change that could have some negative impacts on the entire process
(Nobes, 2014).
The changes had been made in different terms. The statement of changes in equity for the
period, the statement of cash flows for the time period and information based on the comparison
as prescribed by the standard should be considered as critical components in this scenario
(Nobes, 2014). In case of the IAS 1 it has been seen that the Conceptual Framework is something
very helpful for the financial experts. According to this, all the financial statements are prepared
in a normal manner. It assumes that entity is the going concern and it will certainly carry on with
its operations for an indefinite future.
Finally, it can be said that IAS 1 is definitely one of the revolutionary financial standards
that had been implemented to make the entire system much easier. Within the operations of the
IAS 1, the management will have to assess the entity of the so that the going concern can be

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continued properly. This is definitely a very crucial feature of the financial standard indeed. The
entity will have to prepare the financial statements without the cash flow. Therefore, the
presentation and classification of the items in the scenario can be done with utmost
consciousness of the financial experts.

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References and Bibliography
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Iasplus.co. (2019). IAS 1 — Presentation of Financial Statements. Retrieved 18 September 2019,
from https://www.iasplus.com/en/standards/ias/ias1
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