PHILIPPINE ACCOUNTING STANDARDS 1
PRESENTATION OF FINANCIAL STATEMENTS
Objective of PAS 1
The objective of IAS 1 (revised 1997) is to prescribe the basis for presentation of general purpose financial statements, to ensure
comparability both with the entity's financial statements of previous periods and with the financial statements of other entities. IAS
1 sets out the overall framework and responsibilities for the presentation of financial statements, guidelines for their structure and
minimum requirements for the content of the financial statements. Standards for recognising, measuring, and disclosing specific
transactions are addressed in other Standards and Interpretations.
Applies to all general purpose financial statements based on International Financial Reporting Standards. [IAS 1.2]
General purpose financial statements are those intended to serve users who do not have the authority to demand financial reports
tailored for their own needs. [IAS 1.3]
Objective of Financial Statements
The objective of general purpose financial statements is to provide information about the financial position, financial performance,
and cash flows of an entity that is useful to a wide range of users in making economic decisions. To meet that objective, financial
statements provide information about an entity's: [IAS 1.7]
Income and expenses, including gains and losses.
Other changes in equity.
That information, along with other information in the notes, assists users of financial statements in predicting the entity's future cash
flows and, in particular, their timing and certainty.
Components of Financial Statements
A complete set of financial statements should include: [IAS 1.8]
* a balance sheet,
* income statement,
* a statement of changes in equity showing either:
o all changes in equity, or
o changes in equity other than those arising from transactions with equity holders acting in their capacity as equity holders;
* cash flow statement, and
* notes, comprising a summary of accounting policies and other explanatory notes.
Reports that are presented outside of the financial statements -- including financial reviews by management, environmental reports,
and value added statements -- are outside the scope of IFRSs. [IAS 1.9-10]
Fair Presentation and Compliance with IFRSs
The financial statements must "present fairly" the financial position, financial performance and cash flows of an entity. Fair
presentation requires the faithful representation of the effects of transactions, other events, and conditions in accordance with the
definitions and recognition criteria for assets, liabilities, income and expenses set out in the Framework. The application of IFRSs,
with additional disclosure when necessary, is presumed to result in financial statements that achieve a fair presentation. [IAS 1.13]
IAS 1 requires that an entity whose financial statements comply with IFRSs make an explicit and unreserved statement of such