General purpose financial statements (referred to as ‘financial statements’) are those intended to meet the needs of users who are not in a position to require an undertaking to prepare reports tailored to their particular information needs.
Impracticable Applying a requirement is impracticable when the undertaking cannot apply it, after making every reasonable effort to do so.
Material Omissions (or misstatements of items) are material if they could influence the decisions of users, taken on the basis of the financial statements.
Materiality depends on the size, and nature, of the omission or misstatement judged in the surrounding circumstances. The size or nature of the item, or a combination of both, could be the determining factor.
Notes contain information in addition to that presented in the statement of financial position, statement of comprehensive income, separate income statement (if presented), statement of changes in equity, and statement of cash flows.
Notes provide narrative descriptions, or disaggregations of items in those statements, and information about items that do not qualify for recognition in those statements.
Assessing whether an omission, or misstatement, could influence decisions of users, and so be material, requires consideration of the characteristics of those users.
Users are assumed to have a reasonable knowledge of business and accounting, and a willingness to study the information with reasonable diligence.
The assessment needs to take into account how users, with such attributes, are influenced in making decisions.
Other comprehensive income comprises items of income and expense (including reclassification adjustments) that are not recognised in profit or loss as required or permitted by other IFRSs.
The components of other comprehensive income include:
(i) changes in revaluation surplus (see IAS 16 Property, Plant and
Equipment and IAS 38 Intangible Assets);
(ii) actuarial gains and losses on defined benefit plans recognised in accordance IAS 19 Employee Benefits;
(iii) gains and losses arising from translating the financial statements of a foreign operation (see IAS 21);
(iv) gains and losses on remeasuring available-for-sale financial assets
(see IAS 39 Financial Instruments);
(v) the effective portion of gains and losses on hedging instruments in a cash
flow hedge (see IAS 39).
Owners are holders of instruments classified as equity.
Profit or loss is the total of income less expenses, excluding the components of other comprehensive income.
Reclassification adjustments are amounts reclassified to profit or loss in the current period that were recognised in other comprehensive income in the current or previous periods.
Total comprehensive income is the change in equity during a period resulting from transactions and other events, other than those changes resulting from transactions with owners in their capacity as owners.
Total comprehensive income comprises all components of ‘profit or loss’
and of ‘other comprehensive income’.
Although IAS 1 uses the terms ‘other comprehensive income’, ‘profit or loss’ and ‘total comprehensive income’, an undertaking may use other terms to describe the totals as long as the meaning is clear. For example, an undertaking may use the term ‘net income’ to describe profit or loss.
Profit or loss is the total of income less expenses, excluding the components of other comprehensive income.
Reclassification adjustments are amounts reclassified to profit or loss in the current period that were recognised in other comprehensive income in the current or previous periods.
Total comprehensive income is the change in equity during a period resulting from transactions and other events, other than those changes resulting from transactions with owners in their capacity as owners.
Total comprehensive income comprises all components of ‘profit or loss’
and of ‘other comprehensive income’.
Although IAS 1 uses the terms ‘other comprehensive income’, ‘profit or loss’ and ‘total comprehensive income’, an undertaking may use other terms to describe the totals as long as the meaning is clear.
For example, an undertaking may use the term ‘net income’ to describe profit or loss.
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