International Financial Reporting Standards_guide.pdf

Chapter 3 Presentation of Financial Statements (IAS 1) 19
3.4.2 Departure from the requirements of an IFRS is allowed only in the extremely rare
circumstance in which the application of the IFRS would be so misleading as to conflict with
the objectives of financial statements. In such circumstances, the entity should disclose the
following:
■ that management has concluded that the financial statements present fairly the entity’s
financial position, financial performance, and cash flows;
■ that it has complied with the applicable IFRSs, except that it has departed from a
particular requirement to achieve fair presentation;
■ the title of the IFRS from which it has departed;
■ the nature and reasons for the departure; and
■ the financial effect of the departure, for each period presented.
3.4.3 The presentation and classification of items should be consistent from one period to
another unless a change would result in a more appropriate presentation, or a change is
required by the IFRS.
3.4.4 A complete set of financial statements comprises the following:
■ Statement of Financial Position (formerly Balance Sheet);
■ Statement of Comprehensive Income (formerly Income Statement);
■ Statement of changes in equity;
■ Statement of cash flows;
■ Notes to the financial statements that contain accounting policies and other explanatory
information; and
■ Statement of financial position for the beginning of the earliest comparative period
when an entity applies an accounting policy retrospectively, makes a retrospective
restatement of items in its financial statements, or reclassifies items in its financial
statements.
Entities are encouraged to furnish other related financial and nonfinancial information in
addition to financial statements. This information can include a financial review by management
that describes and explains the main features of the entity’s financial performance and
position, environmental reports, and value-added statements. Reports that are presented
outside of the financial statements are outside of the scope of IFRSs.
3.4.5 Fair presentation. The financial statements should present fairly the financial position,
financial performance, and cash flows of the entity.
The following aspects should be addressed with regard to compliance with the IFRS:
■ Compliance with the IFRS should be disclosed.
■ Compliance with all requirements of each standard is compulsory.
■ Disclosure cannot rectify inappropriate accounting treatments.
■ If the requirements of a new or revised IFRS are adopted before its effective date, this
fact should be disclosed.
3.4.6 Financial statements should be presented on a going-concern basis unless management
intends to liquidate the entity or cease trading, or has no realistic alternative but to do
so. If an entity does not present its financial statements on a going-concern basis, it shall
disclose the fact, the basis on which it has prepared the financial statements, and the reason
why the entity is not considered to be a going concern. Uncertainties related to events and
conditions that cast significant doubt on the entity’s ability to continue as a going concern
should be disclosed.