A complete set of financial statements comprises a statement of financial position, a statement of profit or loss and other comprehensive income, a statement of changes in equity and a statement of cash flows. This seminar deals with IAS 1 and IAS 7 – the two standards that set out the requirements for the presentation of financial statements.
IAS 1 Presentation of Financial Statements was reissued in September 2007 and applies to annual periods beginning on or after 1 January 2009. It prescribes the basis for presentation of general purpose financial statements to ensure comparability both with the entity’s financial statements of previous periods as well as with the financial statements of other entities. The standard sets out the overall requirements for the presentation of financial statements, guidelines for their structure, minimum requirements for their content and certain overriding concepts such as the going concern, the accrual basis of accounting and the current/non-current distinction.
IAS 7 Statement of Cash Flows requires an entity to present a statement of cash flows using either the ‘direct’ or the ‘indirect’ method in order to provide information on the historical changes in cash and cash equivalents by classifying cash flows into operating activities, investing activities or financing activities.