Presentation of Financial Statements (IAS 1)

Question 1

Complete set of Financial Statements (IAS 1.10)

Answer 1

a) a statement of financial position as at the end of the period;

(b) a statement of profit or loss and other comprehensive income for the period;

(c) a statement of changes in equity for the period;

(d) a statement of cash flows for the period;

(e) notes, comprising material accounting policy information and other explanatory information;

(ea) comparative information in respect of the preceding period as specified in paragraphs 38 and 38A; and

(f) a statement of financial position as at the beginning of the preceding period when an entity applies an accounting policy retrospectively or makes a retrospective restatement of items in its financial statements, or when it reclassifies items in its financial statements in accordance with paragraphs 40A–40D.

Question 2

Transactions are recorded in the period in which they occurred, rather than when the cash flow occurred

Answer 2

Accrual Accounting

Question 3

Transactions are recorded int he period in which the cash flow occurred, rather than when the transaction actually occurred

Answer 3

Cash Accounting

Question 4

An entity shall classify an asset as current when (IAS 1.66)

Answer 4

(a) it expects to realise the asset, or intends to sell or consume it, in its normal operating cycle;

(b) it holds the asset primarily for the purpose of trading;

(c) it expects to realise the asset within twelve months after the reporting period; or

(d) the asset is cash or a cash equivalent (as defined in IAS 7) unless the asset is restricted from being exchanged or used to settle a liability for at least twelve months after the reporting period.

Question 5

An entity shall classify a liability as current when (IAS 1.69):

Answer 5

(a) it expects to settle the liability in its normal operating cycle;

(b) it holds the liability primarily for the purpose of trading;

(c) the liability is due to be settled within twelve months after the reporting period; or

(d) it does not have the right at the end of the reporting period to defer settlement of the liability for at least twelve months after the reporting period.