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Understanding IAS 1 Financial Statement Notes

The document provides guidance on the structure and content of notes that accompany financial statements. It states that notes should: (1) present information on the basis of preparation and accounting policies used; (2) disclose information required by IFRS that is not presented elsewhere; and (3) provide additional relevant information not shown elsewhere. Notes should be presented systematically and cross-referenced. They normally include: (1) a statement of compliance; (2) accounting policies; (3) information supporting items in statements; and (4) other disclosures like contingencies, commitments, and financial risk management. The document also provides details on specific disclosure requirements for accounting policies, estimates, capital, dividends, and entity information.

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13 views4 pages

Understanding IAS 1 Financial Statement Notes

The document provides guidance on the structure and content of notes that accompany financial statements. It states that notes should: (1) present information on the basis of preparation and accounting policies used; (2) disclose information required by IFRS that is not presented elsewhere; and (3) provide additional relevant information not shown elsewhere. Notes should be presented systematically and cross-referenced. They normally include: (1) a statement of compliance; (2) accounting policies; (3) information supporting items in statements; and (4) other disclosures like contingencies, commitments, and financial risk management. The document also provides details on specific disclosure requirements for accounting policies, estimates, capital, dividends, and entity information.

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Carms
Copyright
© All Rights Reserved
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IAS 1 NOTES TO FS YES N0 NA

Notes
Structure
103 The notes shall:
(a) present information about the
basis of preparation of the financial
statements and the specific
accounting policies used in
accordance with paragraphs 108–
115;
(b) disclose the information required
by IFRSs that is not presented on the
face of the balance sheet, income
statement, statement of changes in
equity or cash flow statement; and
(c) provide additional information that
is not presented on the face of the
balance sheet, income statement,
statement of changes in equity or
cash flow statement, but is relevant
to an understanding of any of them.

104 Notes shall, as far as


practicable, be presented in a
systematic manner. Each item on the
face of the balance sheet, income
statement, statement of changes in
equity and cash flow statement shall
be cross-referenced to any related
information in the notes.

105 Notes are normally presented in


the following order, which assists
users in understanding the financial
statements and comparing them with
financial statements of other entities:
(a) a statement of compliance with
IFRSs (see paragraph 14);
(b) a summary of significant
accounting policies applied (see
paragraph 108);
(c) supporting information for items
presented on the face of the balance
sheet, income statement, statement
IAS 1 NOTES TO FS YES N0 NA
of changes in equity and cash flow
statement, in the order in which each
statement and each line item is
presented; and
(d) other disclosures, including:
(i) contingent liabilities (see IAS 37)
and unrecognized contractual
commitments; and
(ii) non-financial disclosures, e.g. the
entity’s financial risk management
objectives and policies (see IFRS 7).

Disclosure of accounting policies


108 An entity shall disclose in the
summary of significant accounting
policies:
(a) the measurement basis (or bases)
used in preparing the financial
statements; and
(b) the other accounting policies used
that are relevant to an understanding
of the financial statements.

113 An entity shall disclose, in the


summary of significant accounting
policies or other notes, the
judgments, apart from those
involving estimations (see paragraph
116), that management has made in
the process of applying the entity’s
accounting policies and that have the
most significant effect on the
amounts recognized in the financial
statements.

Key sources of estimation uncertainty


116 An entity shall disclose in the
notes information about the key
assumptions concerning the future,
and other key sources of estimation
uncertainty at the balance sheet date,
that have a significant risk of causing
a material adjustment to the carrying
IAS 1 NOTES TO FS YES N0 NA
amounts of assets and liabilities
within the next financial year.
In respect of those assets and
liabilities, the notes shall include
details of:
(a) their nature; and
(b) their carrying amount as at the
balance sheet date.

Capital
124A An entity shall disclose
information that enables users of its
financial statements to evaluate the
entity’s objectives, policies and
processes for managing capital.

Other disclosures
125 An entity shall disclose in the
notes:
(a) the amount of dividends proposed
or declared before the financial
statements were authorized for issue
but not recognized as a distribution to
equity holders during the period, and
the related amount per share; and
(b) the amount of any cumulative
preference dividends not recognized.

126 An entity shall disclose the


following, if not disclosed elsewhere
in information published with the
financial statements:
(a) the domicile and legal form of the
entity, its country of incorporation
and the address of its registered
office (or principal place of business,
if different from the registered office);
(b) a description of the nature of the
entity’s operations and its principal
activities; and
(c) the name of the parent and the
ultimate parent of the group.

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