ANNEX

INTERNATIONAL ACCOUNTING STANDARDS

Reproduction allowed within the European Economic Area. All existing rights reserved outside the EEA, with the exception of the right to reproduce for the purposes of personal use or other fair dealing. Further information can be obtained from the IASB at www.iasb.org

INTERNATIONAL ACCOUNTING STANDARD 1

Presentation of Financial Statements

OBJECTIVE

This Standard prescribes 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. It sets out overall requirements for the presentation of financial statements, guidelines for their structure and minimum requirements for their content.

SCOPE

An entity shall apply this Standard in preparing and presenting general purpose financial statements in accordance with International Financial Reporting Standards (IFRSs).

Other IFRSs set out the recognition, measurement and disclosure requirements for specific transactions and other events.

This Standard does not apply to the structure and content of condensed interim financial statements prepared in accordance with IAS 34 Interim Financial Reporting. However, paragraphs 15–35 apply to such financial statements. This Standard applies equally to all entities, including those that present consolidated financial statements and those that present separate financial statements as defined in IAS 27 Consolidated and Separate Financial Statements.

This Standard uses terminology that is suitable for profit-oriented entities, including public sector business entities. If entities with not-for-profit activities in the private sector or the public sector apply this Standard, they may need to amend the descriptions used for particular line items in the financial statements and for the financial statements themselves.

Similarly, entities that do not have equity as defined in IAS 32 Financial Instruments: Presentation (e.g. some mutual funds) and entities whose share capital is not equity (e.g. some co-operative entities) may need to adapt the financial statement presentation of members’ or unitholders’ interests.

DEFINITIONS

Total comprehensive income comprises all components of ‘profit or loss’ and of ‘other comprehensive income’.

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.

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.

Profit or loss is the total of income less expenses, excluding the components of other comprehensive income.

the effective portion of gains and losses on hedging instruments in a cash flow hedge (see IAS 39).

gains and losses on remeasuring available-for-sale financial assets (see IAS 39 Financial Instruments: Recognition and Measurement);

gains and losses arising from translating the financial statements of a foreign operation (see IAS 21 The Effects of Changes in Foreign Exchange Rates);

actuarial gains and losses on defined benefit plans recognised in accordance with paragraph 93A of IAS 19 Employee Benefits;

changes in revaluation surplus (see IAS 16 Property, Plant and Equipment and IAS 38 Intangible Assets);

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.

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 presented in those statements and information about items that do not qualify for recognition in those statements.

Assessing whether an omission or misstatement could influence economic decisions of users, and so be material, requires consideration of the characteristics of those users. The Framework for the Preparation and Presentation of Financial Statements states in paragraph 25 that ‘users are assumed to have a reasonable knowledge of business and economic activities and accounting and a willingness to study the information with reasonable diligence.’ Therefore, the assessment needs to take into account how users with such attributes could reasonably be expected to be influenced in making economic decisions.

Material Omissions or misstatements of items are material if they could, individually or collectively, influence the economic decisions that users make 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.

Interpretations developed by the International Financial Reporting Interpretations Committee (IFRIC) or the former Standing Interpretations Committee (SIC).

International Financial Reporting Standards (IFRSs) are Standards and Interpretations adopted by the International Accounting Standards Board (IASB). They comprise:

Impracticable Applying a requirement is impracticable when the entity cannot apply it after making every reasonable effort to do so.

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 entity to prepare reports tailored to their particular information needs.

The following terms are used in this Standard with the meanings specified:

Although this Standard uses the terms ‘other comprehensive income’, ‘profit or loss’ and ‘total comprehensive income’, an entity may use other terms to describe the totals as long as the meaning is clear. For example, an entity may use the term ‘net income’ to describe profit or loss.

FINANCIAL STATEMENTS

Purpose of financial statements

This 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.

contributions by and distributions to owners in their capacity as owners; and

Financial statements are a structured representation of the financial position and financial performance of an entity. The objective of 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. Financial statements also show the results of the management’s stewardship of the resources entrusted to it. To meet this objective, financial statements provide information about an entity’s:

Complete set of financial statements

An entity may use titles for the statements other than those used in this Standard.

a statement of financial position as at the beginning of the earliest comparative 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.

notes, comprising a summary of significant accounting policies and other explanatory information; and

a statement of changes in equity for the period;

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

An entity shall present with equal prominence all of the financial statements in a complete set of financial statements.

As permitted by paragraph 81, an entity may present the components of profit or loss either as part of a single statement of comprehensive income or in a separate income statement. When an income statement is presented it is part of a complete set of financial statements and shall be displayed immediately before the statement of comprehensive income.

the entity’s resources not recognised in the statement of financial position in accordance with IFRSs.

the entity’s sources of funding and its targeted ratio of liabilities to equity; and

the main factors and influences determining financial performance, including changes in the environment in which the entity operates, the entity’s response to those changes and their effect, and the entity’s policy for investment to maintain and enhance financial performance, including its dividend policy;

Many entities present, outside the financial statements, a financial review by management that describes and explains the main features of the entity’s financial performance and financial position, and the principal uncertainties it faces. Such a report may include a review of:

Many entities also present, outside the financial statements, reports and statements such as environmental reports and value added statements, particularly in industries in which environmental factors are significant and when employees are regarded as an important user group. Reports and statements presented outside financial statements are outside the scope of IFRSs.

General features

Fair presentation and compliance with IFRSs

Financial statements shall 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.

An entity whose financial statements comply with IFRSs shall make an explicit and unreserved statement of such compliance in the notes. An entity shall not describe financial statements as complying with IFRSs unless they comply with all the requirements of IFRSs.

to provide additional disclosures when compliance with the specific requirements in IFRSs is insufficient to enable users to understand the impact of particular transactions, other events and conditions on the entity’s financial position and financial performance.

to present information, including accounting policies, in a manner that provides relevant, reliable, comparable and understandable information.

to select and apply accounting policies in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. IAS 8 sets out a hierarchy of authoritative guidance that management considers in the absence of an IFRS that specifically applies to an item.

In virtually all circumstances, an entity achieves a fair presentation by compliance with applicable IFRSs. A fair presentation also requires an entity:

An entity cannot rectify inappropriate accounting policies either by disclosure of the accounting policies used or by notes or explanatory material.

In the extremely rare circumstances in which management concludes that compliance with a requirement in an IFRS would be so misleading that it would conflict with the objective of financial statements set out in the Framework, the entity shall depart from that requirement in the manner set out in paragraph 20 if the relevant regulatory framework requires, or otherwise does not prohibit, such a departure.

for each period presented, the financial effect of the departure on each item in the financial statements that would have been reported in complying with the requirement.

the title of the IFRS from which the entity has departed, the nature of the departure, including the treatment that the IFRS would require, the reason why that treatment would be so misleading in the circumstances that it would conflict with the objective of financial statements set out in the Framework, and the treatment adopted; and

that it has complied with applicable IFRSs, except that it has departed from a particular requirement to achieve a fair presentation;

that management has concluded that the financial statements present fairly the entity’s financial position, financial performance and cash flows;

When an entity departs from a requirement of an IFRS in accordance with paragraph 19, it shall disclose:

When an entity has departed from a requirement of an IFRS in a prior period, and that departure affects the amounts recognised in the financial statements for the current period, it shall make the disclosures set out in paragraph 20(c) and (d).

Paragraph 21 applies, for example, when an entity departed in a prior period from a requirement in an IFRS for the measurement of assets or liabilities and that departure affects the measurement of changes in assets and liabilities recognised in the current period’s financial statements.

for each period presented, the adjustments to each item in the financial statements that management has concluded would be necessary to achieve a fair presentation.

the title of the IFRS in question, the nature of the requirement, and the reason why management has concluded that complying with that requirement is so misleading in the circumstances that it conflicts with the objective of financial statements set out in the Framework; and

In the extremely rare circumstances in which management concludes that compliance with a requirement in an IFRS would be so misleading that it would conflict with the objective of financial statements set out in the Framework, but the relevant regulatory framework prohibits departure from the requirement, the entity shall, to the maximum extent possible, reduce the perceived misleading aspects of compliance by disclosing:

how the entity’s circumstances differ from those of other entities that comply with the requirement. If other entities in similar circumstances comply with the requirement, there is a rebuttable presumption that the entity’s compliance with the requirement would not be so misleading that it would conflict with the objective of financial statements set out in the Framework.

why the objective of financial statements is not achieved in the particular circumstances; and

For the purpose of paragraphs 19–23, an item of information would conflict with the objective of financial statements when it does not represent faithfully the transactions, other events and conditions that it either purports to represent or could reasonably be expected to represent and, consequently, it would be likely to influence economic decisions made by users of financial statements. When assessing whether complying with a specific requirement in an IFRS would be so misleading that it would conflict with the objective of financial statements set out in the Framework, management considers:

Going concern

When preparing financial statements, management shall make an assessment of an entity’s ability to continue as a going concern. An entity shall prepare financial statements on a going concern basis unless management either intends to liquidate the entity or to cease trading, or has no realistic alternative but to do so. When management is aware, in making its assessment, of material uncertainties related to events or conditions that may cast significant doubt upon the entity’s ability to continue as a going concern, the entity shall disclose those uncertainties. When an entity does not prepare financial statements on a going concern basis, it shall disclose that fact, together with the basis on which it prepared the financial statements and the reason why the entity is not regarded as a going concern.

In assessing whether the going concern assumption is appropriate, management takes into account all available information about the future, which is at least, but is not limited to, twelve months from the end of the reporting period. The degree of consideration depends on the facts in each case. When an entity has a history of profitable operations and ready access to financial resources, the entity may reach a conclusion that the going concern basis of accounting is appropriate without detailed analysis. In other cases, management may need to consider a wide range of factors relating to current and expected profitability, debt repayment schedules and potential sources of replacement financing before it can satisfy itself that the going concern basis is appropriate.

Accrual basis of accounting

An entity shall prepare its financial statements, except for cash flow information, using the accrual basis of accounting.

When the accrual basis of accounting is used, an entity recognises items as assets, liabilities, equity, income and expenses (the elements of financial statements) when they satisfy the definitions and recognition criteria for those elements in the Framework.

Materiality and aggregation

An entity shall present separately each material class of similar items. An entity shall present separately items of a dissimilar nature or function unless they are immaterial.

Financial statements result from processing large numbers of transactions or other events that are aggregated into classes according to their nature or function. The final stage in the process of aggregation and classification is the presentation of condensed and classified data, which form line items in the financial statements. If a line item is not individually material, it is aggregated with other items either in those statements or in the notes. An item that is not sufficiently material to warrant separate presentation in those statements may warrant separate presentation in the notes.

An entity need not provide a specific disclosure required by an IFRS if the information is not material.

Offsetting

An entity shall not offset assets and liabilities or income and expenses, unless required or permitted by an IFRS.

An entity reports separately both assets and liabilities, and income and expenses. Offsetting in the statements of comprehensive income or financial position or in the separate income statement (if presented), except when offsetting reflects the substance of the transaction or other event, detracts from the ability of users both to understand the transactions, other events and conditions that have occurred and to assess the entity’s future cash flows. Measuring assets net of valuation allowances — for example, obsolescence allowances on inventories and doubtful debts allowances on receivables — is not offsetting.

an entity may net expenditure related to a provision that is recognised in accordance with IAS 37 Provisions, Contingent Liabilities and Contingent Assets and reimbursed under a contractual arrangement with a third party (for example, a supplier’s warranty agreement) against the related reimbursement.

an entity presents gains and losses on the disposal of non-current assets, including investments and operating assets, by deducting from the proceeds on disposal the carrying amount of the asset and related selling expenses; and

IAS 18 Revenue defines revenue and requires an entity to measure it at the fair value of the consideration received or receivable, taking into account the amount of any trade discounts and volume rebates the entity allows. An entity undertakes, in the course of its ordinary activities, other transactions that do not generate revenue but are incidental to the main revenue-generating activities. An entity presents the results of such transactions, when this presentation reflects the substance of the transaction or other event, by netting any income with related expenses arising on the same transaction. For example:

In addition, an entity presents on a net basis gains and losses arising from a group of similar transactions, for example, foreign exchange gains and losses or gains and losses arising on financial instruments held for trading. However, an entity presents such gains and losses separately if they are material.

Frequency of reporting

the fact that amounts presented in the financial statements are not entirely comparable.

the reason for using a longer or shorter period, and

An entity shall present a complete set of financial statements (including comparative information) at least annually. When an entity changes the end of its reporting period and presents financial statements for a period longer or shorter than one year, an entity shall disclose, in addition to the period covered by the financial statements:

Normally, an entity consistently prepares financial statements for a one-year period. However, for practical reasons, some entities prefer to report, for example, for a 52-week period. This Standard does not preclude this practice.

Comparative information

Except when IFRSs permit or require otherwise, an entity shall disclose comparative information in respect of the previous period for all amounts reported in the current period’s financial statements. An entity shall include comparative information for narrative and descriptive information when it is relevant to an understanding of the current period’s financial statements.

the end of the previous period (which is the same as the beginning of the current period), and

An entity disclosing comparative information shall present, as a minimum, two statements of financial position, two of each of the other statements, and related notes. 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, it shall present, as a minimum, three statements of financial position, two of each of the other statements, and related notes. An entity presents statements of financial position as at:

In some cases, narrative information provided in the financial statements for the previous period(s) continues to be relevant in the current period. For example, an entity discloses in the current period details of a legal dispute whose outcome was uncertain at the end of the immediately preceding reporting period and that is yet to be resolved. Users benefit from information that the uncertainty existed at the end of the immediately preceding reporting period, and about the steps that have been taken during the period to resolve the uncertainty.

the amount of each item or class of items that is reclassified; and

When the entity changes the presentation or classification of items in its financial statements, the entity shall reclassify comparative amounts unless reclassification is impracticable. When the entity reclassifies comparative amounts, the entity shall disclose:

the nature of the adjustments that would have been made if the amounts had been reclassified.

the reason for not reclassifying the amounts, and

When it is impracticable to reclassify comparative amounts, an entity shall disclose:

Enhancing the inter-period comparability of information assists users in making economic decisions, especially by allowing the assessment of trends in financial information for predictive purposes. In some circumstances, it is impracticable to reclassify comparative information for a particular prior period to achieve comparability with the current period. For example, an entity may not have collected data in the prior period(s) in a way that allows reclassification, and it may be impracticable to recreate the information.

IAS 8 sets out the adjustments to comparative information required when an entity changes an accounting policy or corrects an error.

Consistency of presentation

it is apparent, following a significant change in the nature of the entity’s operations or a review of its financial statements, that another presentation or classification would be more appropriate having regard to the criteria for the selection and application of accounting policies in IAS 8; or

An entity shall retain the presentation and classification of items in the financial statements from one period to the next unless:

For example, a significant acquisition or disposal, or a review of the presentation of the financial statements, might suggest that the financial statements need to be presented differently. An entity changes the presentation of its financial statements only if the changed presentation provides information that is reliable and more relevant to users of the financial statements and the revised structure is likely to continue, so that comparability is not impaired. When making such changes in presentation, an entity reclassifies its comparative information in accordance with paragraphs 41 and 42.

STRUCTURE AND CONTENT

Introduction

This Standard requires particular disclosures in the statement of financial position or of comprehensive income, in the separate income statement (if presented), or in the statement of changes in equity and requires disclosure of other line items either in those statements or in the notes. IAS 7 Statement of Cash Flows sets out requirements for the presentation of cash flow information.

This Standard sometimes uses the term ‘disclosure’ in a broad sense, encompassing items presented in the financial statements. Disclosures are also required by other IFRSs. Unless specified to the contrary elsewhere in this Standard or in another IFRS, such disclosures may be made in the financial statements.

Identification of the financial statements

An entity shall clearly identify the financial statements and distinguish them from other information in the same published document.

IFRSs apply only to financial statements, and not necessarily to other information presented in an annual report, a regulatory filing, or another document. Therefore, it is important that users can distinguish information that is prepared using IFRSs from other information that may be useful to users but is not the subject of those requirements.

the level of rounding used in presenting amounts in the financial statements.

the presentation currency, as defined in IAS 21; and

the date of the end of the reporting period or the period covered by the set of financial statements or notes;

whether the financial statements are of an individual entity or a group of entities;

the name of the reporting entity or other means of identification, and any change in that information from the end of the preceding reporting period;

An entity shall clearly identify each financial statement and the notes. In addition, an entity shall display the following information prominently, and repeat it when necessary for the information presented to be understandable:

An entity meets the requirements in paragraph 51 by presenting appropriate headings for pages, statements, notes, columns and the like. Judgement is required in determining the best way of presenting such information. For example, when an entity presents the financial statements electronically, separate pages are not always used; an entity then presents the above items to ensure that the information included in the financial statements can be understood.

An entity often makes financial statements more understandable by presenting information in thousands or millions of units of the presentation currency. This is acceptable as long as the entity discloses the level of rounding and does not omit material information.

Statement of financial position

Information to be presented in the statement of financial position

issued capital and reserves attributable to owners of the parent.

liabilities included in disposal groups classified as held for sale in accordance with IFRS 5;

liabilities and assets for current tax, as defined in IAS 12 Income Taxes;

the total of assets classified as held for sale and assets included in disposal groups classified as held for sale in accordance with IFRS 5 Non-current Assets Held for Sale and Discontinued Operations;

As a minimum, the statement of financial position shall include line items that present the following amounts:

An entity shall present additional line items, headings and subtotals in the statement of financial position when such presentation is relevant to an understanding of the entity’s financial position.

When an entity presents current and non-current assets, and current and non-current liabilities, as separate classifications in its statement of financial position, it shall not classify deferred tax assets (liabilities) as current assets (liabilities).

the descriptions used and the ordering of items or aggregation of similar items may be amended according to the nature of the entity and its transactions, to provide information that is relevant to an understanding of the entity’s financial position. For example, a financial institution may amend the above descriptions to provide information that is relevant to the operations of a financial institution.

line items are included when the size, nature or function of an item or aggregation of similar items is such that separate presentation is relevant to an understanding of the entity’s financial position; and

This Standard does not prescribe the order or format in which an entity presents items. Paragraph 54 simply lists items that are sufficiently different in nature or function to warrant separate presentation in the statement of financial position. In addition:

the function of assets within the entity; and

An entity makes the judgement about whether to present additional items separately on the basis of an assessment of:

The use of different measurement bases for different classes of assets suggests that their nature or function differs and, therefore, that an entity presents them as separate line items. For example, different classes of property, plant and equipment can be carried at cost or at revalued amounts in accordance with IAS 16.

Current/non-current distinction

An entity shall present current and non-current assets, and current and non-current liabilities, as separate classifications in its statement of financial position in accordance with paragraphs 66–76 except when a presentation based on liquidity provides information that is reliable and more relevant. When that exception applies, an entity shall present all assets and liabilities in order of liquidity.

more than twelve months after the reporting period.

no more than twelve months after the reporting period, and

Whichever method of presentation is adopted, an entity shall disclose the amount expected to be recovered or settled after more than twelve months for each asset and liability line item that combines amounts expected to be recovered or settled:

When an entity supplies goods or services within a clearly identifiable operating cycle, separate classification of current and non-current assets and liabilities in the statement of financial position provides useful information by distinguishing the net assets that are continuously circulating as working capital from those used in the entity’s long-term operations. It also highlights assets that are expected to be realised within the current operating cycle, and liabilities that are due for settlement within the same period.

For some entities, such as financial institutions, a presentation of assets and liabilities in increasing or decreasing order of liquidity provides information that is reliable and more relevant than a current/non-current presentation because the entity does not supply goods or services within a clearly identifiable operating cycle.

In applying paragraph 60, an entity is permitted to present some of its assets and liabilities using a current/non-current classification and others in order of liquidity when this provides information that is reliable and more relevant. The need for a mixed basis of presentation might arise when an entity has diverse operations.

Information about expected dates of realisation of assets and liabilities is useful in assessing the liquidity and solvency of an entity. IFRS 7 Financial Instruments: Disclosures requires disclosure of the maturity dates of financial assets and financial liabilities. Financial assets include trade and other receivables, and financial liabilities include trade and other payables. Information on the expected date of recovery of non-monetary assets such as inventories and expected date of settlement for liabilities such as provisions is also useful, whether assets and liabilities are classified as current or as non-current. For example, an entity discloses the amount of inventories that are expected to be recovered more than twelve months after the reporting period.

Current assets

An entity shall classify all other assets as non-current.

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.

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

it holds the asset primarily for the purpose of trading;

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

An entity shall classify an asset as current when:

This Standard uses the term ‘non-current’ to include tangible, intangible and financial assets of a long-term nature. It does not prohibit the use of alternative descriptions as long as the meaning is clear.

The operating cycle of an entity is the time between the acquisition of assets for processing and their realisation in cash or cash equivalents. When the entity’s normal operating cycle is not clearly identifiable, it is assumed to be twelve months. Current assets include assets (such as inventories and trade receivables) that are sold, consumed or realised as part of the normal operating cycle even when they are not expected to be realised within twelve months after the reporting period. Current assets also include assets held primarily for the purpose of trading (financial assets within this category are classified as held for trading in accordance with IAS 39) and the current portion of non-current financial assets.

Current liabilities

An entity shall classify all other liabilities as non-current.

the entity does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting period.

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

it holds the liability primarily for the purpose of trading;

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

An entity shall classify a liability as current when:

Some current liabilities, such as trade payables and some accruals for employee and other operating costs, are part of the working capital used in the entity’s normal operating cycle. An entity classifies such operating items as current liabilities even if they are due to be settled more than twelve months after the reporting period. The same normal operating cycle applies to the classification of an entity’s assets and liabilities. When the entity’s normal operating cycle is not clearly identifiable, it is assumed to be twelve months.

Other current liabilities are not settled as part of the normal operating cycle, but are due for settlement within twelve months after the reporting period or held primarily for the purpose of trading. Examples are financial liabilities classified as held for trading in accordance with IAS 39, bank overdrafts, and the current portion of non-current financial liabilities, dividends payable, income taxes and other non-trade payables. Financial liabilities that provide financing on a long-term basis (i.e. are not part of the working capital used in the entity’s normal operating cycle) and are not due for settlement within twelve months after the reporting period are non-current liabilities, subject to paragraphs 74 and 75.

an agreement to refinance, or to reschedule payments, on a long-term basis is completed after the reporting period and before the financial statements are authorised for issue.

the original term was for a period longer than twelve months, and

An entity classifies its financial liabilities as current when they are due to be settled within twelve months after the reporting period, even if:

If an entity expects, and has the discretion, to refinance or roll over an obligation for at least twelve months after the reporting period under an existing loan facility, it classifies the obligation as non-current, even if it would otherwise be due within a shorter period. However, when refinancing or rolling over the obligation is not at the discretion of the entity (for example, there is no arrangement for refinancing), the entity does not consider the potential to refinance the obligation and classifies the obligation as current.

When an entity breaches a provision of a long-term loan arrangement on or before the end of the reporting period with the effect that the liability becomes payable on demand, it classifies the liability as current, even if the lender agreed, after the reporting period and before the authorisation of the financial statements for issue, not to demand payment as a consequence of the breach. An entity classifies the liability as current because, at the end of the reporting period, it does not have an unconditional right to defer its settlement for at least twelve months after that date.

However, an entity classifies the liability as non-current if the lender agreed by the end of the reporting period to provide a period of grace ending at least twelve months after the reporting period, within which the entity can rectify the breach and during which the lender cannot demand immediate repayment.

the granting by the lender of a period of grace to rectify a breach of a long-term loan arrangement ending at least twelve months after the reporting period.

In respect of loans classified as current liabilities, if the following events occur between the end of the reporting period and the date the financial statements are authorised for issue, those events are disclosed as non-adjusting events in accordance with IAS 10 Events after the Reporting Period:

Information to be presented either in the statement of financial position or in the notes

An entity shall disclose, either in the statement of financial position or in the notes, further subclassifications of the line items presented, classified in a manner appropriate to the entity’s operations.

equity capital and reserves are disaggregated into various classes, such as paid-in capital, share premium and reserves.

provisions are disaggregated into provisions for employee benefits and other items; and

inventories are disaggregated, in accordance with IAS 2 Inventories, into classifications such as merchandise, production supplies, materials, work in progress and finished goods;

receivables are disaggregated into amounts receivable from trade customers, receivables from related parties, prepayments and other amounts;

items of property, plant and equipment are disaggregated into classes in accordance with IAS 16;

The detail provided in subclassifications depends on the requirements of IFRSs and on the size, nature and function of the amounts involved. An entity also uses the factors set out in paragraph 58 to decide the basis of subclassification. The disclosures vary for each item, for example:

a description of the nature and purpose of each reserve within equity.

shares reserved for issue under options and contracts for the sale of shares, including terms and amounts; and

shares in the entity held by the entity or by its subsidiaries or associates; and

the rights, preferences and restrictions attaching to that class including restrictions on the distribution of dividends and the repayment of capital;

a reconciliation of the number of shares outstanding at the beginning and at the end of the period;

par value per share, or that the shares have no par value;

the number of shares issued and fully paid, and issued but not fully paid;

An entity shall disclose the following, either in the statement of financial position or the statement of changes in equity, or in the notes:

An entity without share capital, such as a partnership or trust, shall disclose information equivalent to that required by paragraph 79(a), showing changes during the period in each category of equity interest, and the rights, preferences and restrictions attaching to each category of equity interest.

Statement of comprehensive income

in two statements: a statement displaying components of profit or loss (separate income statement) and a second statement beginning with profit or loss and displaying components of other comprehensive income (statement of comprehensive income).

An entity shall present all items of income and expense recognised in a period:

Information to be presented in the statement of comprehensive income

share of the other comprehensive income of associates and joint ventures accounted for using the equity method; and

each component of other comprehensive income classified by nature (excluding amounts in (h));

the post-tax gain or loss recognised on the measurement to fair value less costs to sell or on the disposal of the assets or disposal group(s) constituting the discontinued operation;

the post-tax profit or loss of discontinued operations and

share of the profit or loss of associates and joint ventures accounted for using the equity method;

As a minimum, the statement of comprehensive income shall include line items that present the following amounts for the period:

profit or loss for the period attributable to:

An entity shall disclose the following items in the statement of comprehensive income as allocations of profit or loss for the period:

An entity may present in a separate income statement (see paragraph 81) the line items in paragraph 82(a)–(f) and the disclosures in paragraph 83(a).

An entity shall present additional line items, headings and subtotals in the statement of comprehensive income and the separate income statement (if presented), when such presentation is relevant to an understanding of the entity’s financial performance.

Because the effects of an entity’s various activities, transactions and other events differ in frequency, potential for gain or loss and predictability, disclosing the components of financial performance assists users in understanding the financial performance achieved and in making projections of future financial performance. An entity includes additional line items in the statement of comprehensive income and in the separate income statement (if presented), and it amends the descriptions used and the ordering of items when this is necessary to explain the elements of financial performance. An entity considers factors including materiality and the nature and function of the items of income and expense. For example, a financial institution may amend the descriptions to provide information that is relevant to the operations of a financial institution. An entity does not offset income and expense items unless the criteria in paragraph 32 are met.

An entity shall not present any items of income or expense as extraordinary items, in the statement of comprehensive income or the separate income statement (if presented), or in the notes.

Profit or loss for the period

An entity shall recognise all items of income and expense in a period in profit or loss unless an IFRS requires or permits otherwise.

Some IFRSs specify circumstances when an entity recognises particular items outside profit or loss in the current period. IAS 8 specifies two such circumstances: the correction of errors and the effect of changes in accounting policies. Other IFRSs require or permit components of other comprehensive income that meet the Framework’s definition of income or expense to be excluded from profit or loss (see paragraph 7).

Other comprehensive income for the period

An entity shall disclose the amount of income tax relating to each component of other comprehensive income, including reclassification adjustments, either in the statement of comprehensive income or in the notes.

before related tax effects with one amount shown for the aggregate amount of income tax relating to those components.

An entity may present components of other comprehensive income either:

An entity shall disclose reclassification adjustments relating to components of other comprehensive income.

Other IFRSs specify whether and when amounts previously recognised in other comprehensive income are reclassified to profit or loss. Such reclassifications are referred to in this Standard as reclassification adjustments. A reclassification adjustment is included with the related component of other comprehensive income in the period that the adjustment is reclassified to profit or loss. For example, gains realised on the disposal of available-for-sale financial assets are included in profit or loss of the current period. These amounts may have been recognised in other comprehensive income as unrealised gains in the current or previous periods. Those unrealised gains must be deducted from other comprehensive income in the period in which the realised gains are reclassified to profit or loss to avoid including them in total comprehensive income twice.

An entity may present reclassification adjustments in the statement of comprehensive income or in the notes. An entity presenting reclassification adjustments in the notes presents the components of other comprehensive income after any related reclassification adjustments.

Reclassification adjustments arise, for example, on disposal of a foreign operation (see IAS 21), on derecognition of available-for-sale financial assets (see IAS 39) and when a hedged forecast transaction affects profit or loss (see paragraph 100 of IAS 39 in relation to cash flow hedges).

Reclassification adjustments do not arise on changes in revaluation surplus recognised in accordance with IAS 16 or IAS 38 or on actuarial gains and losses on defined benefit plans recognised in accordance with paragraph 93A of IAS 19. These components are recognised in other comprehensive income and are not reclassified to profit or loss in subsequent periods. Changes in revaluation surplus may be transferred to retained earnings in subsequent periods as the asset is used or when it is derecognised (see IAS 16 and IAS 38). Actuarial gains and losses are reported in retained earnings in the period that they are recognised as other comprehensive income (see IAS 19).

Information to be presented in the statement of comprehensive income or in the notes

When items of income or expense are material, an entity shall disclose their nature and amount separately.

restructurings of the activities of an entity and reversals of any provisions for the costs of restructuring;

write-downs of inventories to net realisable value or of property, plant and equipment to recoverable amount, as well as reversals of such write-downs;

Circumstances that would give rise to the separate disclosure of items of income and expense include:

An entity shall present an analysis of expenses recognised in profit or loss using a classification based on either their nature or their function within the entity, whichever provides information that is reliable and more relevant.

Entities are encouraged to present the analysis in paragraph 99 in the statement of comprehensive income or in the separate income statement (if presented).

Expenses are subclassified to highlight components of financial performance that may differ in terms of frequency, potential for gain or loss and predictability. This analysis is provided in one of two forms.

Changes in inventories of finished goods and work in progress

The first form of analysis is the ‘nature of expense’ method. An entity aggregates expenses within profit or loss according to their nature (for example, depreciation, purchases of materials, transport costs, employee benefits and advertising costs), and does not reallocate them among functions within the entity. This method may be simple to apply because no allocations of expenses to functional classifications are necessary. An example of a classification using the nature of expense method is as follows:

The second form of analysis is the ‘function of expense’ or ‘cost of sales’ method and classifies expenses according to their function as part of cost of sales or, for example, the costs of distribution or administrative activities. At a minimum, an entity discloses its cost of sales under this method separately from other expenses. This method can provide more relevant information to users than the classification of expenses by nature, but allocating costs to functions may require arbitrary allocations and involve considerable judgement. An example of a classification using the function of expense method is as follows:

An entity classifying expenses by function shall disclose additional information on the nature of expenses, including depreciation and amortisation expense and employee benefits expense.

The choice between the function of expense method and the nature of expense method depends on historical and industry factors and the nature of the entity. Both methods provide an indication of those costs that might vary, directly or indirectly, with the level of sales or production of the entity. Because each method of presentation has merit for different types of entities, this Standard requires management to select the presentation that is reliable and more relevant. However, because information on the nature of expenses is useful in predicting future cash flows, additional disclosure is required when the function of expense classification is used. In paragraph 104, ‘employee benefits’ has the same meaning as in IAS 19.

Statement of changes in equity

for each component of equity, a reconciliation between the carrying amount at the beginning and the end of the period, separately disclosing each change.

the amounts of transactions with owners in their capacity as owners, showing separately contributions by and distributions to owners; and

for each component of equity, the effects of retrospective application or retrospective restatement recognised in accordance with IAS 8;

total comprehensive income for the period, showing separately the total amounts attributable to owners of the parent and to minority interest;

An entity shall present a statement of changes in equity showing in the statement:

An entity shall present, either in the statement of changes in equity or in the notes, the amount of dividends recognised as distributions to owners during the period, and the related amount per share.

In paragraph 106, the components of equity include, for example, each class of contributed equity, the accumulated balance of each class of other comprehensive income and retained earnings.

Changes in an entity’s equity between the beginning and the end of the reporting period reflect the increase or decrease in its net assets during the period. Except for changes resulting from transactions with owners in their capacity as owners (such as equity contributions, reacquisitions of the entity’s own equity instruments and dividends) and transaction costs directly related to such transactions, the overall change in equity during a period represents the total amount of income and expense, including gains and losses, generated by the entity’s activities during that period.

IAS 8 requires retrospective adjustments to effect changes in accounting policies, to the extent practicable, except when the transition provisions in another IFRS require otherwise. IAS 8 also requires restatements to correct errors to be made retrospectively, to the extent practicable. Retrospective adjustments and retrospective restatements are not changes in equity but they are adjustments to the opening balance of retained earnings, except when an IFRS requires retrospective adjustment of another component of equity. Paragraph 106(b) requires disclosure in the statement of changes in equity of the total adjustment to each component of equity resulting from changes in accounting policies and, separately, from corrections of errors. These adjustments are disclosed for each prior period and the beginning of the period.

Statement of cash flows

Cash flow information provides users of financial statements with a basis to assess the ability of the entity to generate cash and cash equivalents and the needs of the entity to utilise those cash flows. IAS 7 sets out requirements for the presentation and disclosure of cash flow information.

Notes

Structure

provide information that is not presented elsewhere in the financial statements, but is relevant to an understanding of any of them.

disclose the information required by IFRSs that is not presented elsewhere in the financial statements; and

present information about the basis of preparation of the financial statements and the specific accounting policies used in accordance with paragraphs 117–124;

An entity shall, as far as practicable, present notes in a systematic manner. An entity shall cross-reference each item in the statements of financial position and of comprehensive income, in the separate income statement (if presented), and in the statements of changes in equity and of cash flows to any related information in the notes.

non-financial disclosures, e.g. the entity’s financial risk management objectives and policies (see IFRS 7).

supporting information for items presented in the statements of financial position and of comprehensive income, in the separate income statement (if presented), and in the statements of changes in equity and of cash flows, in the order in which each statement and each line item is presented; and

An entity normally presents notes in the following order, to assist users to understand the financial statements and to compare them with financial statements of other entities:

In some circumstances, it may be necessary or desirable to vary the order of specific items within the notes. For example, an entity may combine information on changes in fair value recognised in profit or loss with information on maturities of financial instruments, although the former disclosures relate to the statement of comprehensive income or separate income statement (if presented) and the latter relate to the statement of financial position. Nevertheless, an entity retains a systematic structure for the notes as far as practicable.

An entity may present notes providing information about the basis of preparation of the financial statements and specific accounting policies as a separate section of the financial statements.

Disclosure of accounting policies

the other accounting policies used that are relevant to an understanding of the financial statements.

the measurement basis (or bases) used in preparing the financial statements, and

An entity shall disclose in the summary of significant accounting policies:

It is important for an entity to inform users of the measurement basis or bases used in the financial statements (for example, historical cost, current cost, net realisable value, fair value or recoverable amount) because the basis on which an entity prepares the financial statements significantly affects users’ analysis. When an entity uses more than one measurement basis in the financial statements, for example when particular classes of assets are revalued, it is sufficient to provide an indication of the categories of assets and liabilities to which each measurement basis is applied.

In deciding whether a particular accounting policy should be disclosed, management considers whether disclosure would assist users in understanding how transactions, other events and conditions are reflected in reported financial performance and financial position. Disclosure of particular accounting policies is especially useful to users when those policies are selected from alternatives allowed in IFRSs. An example is disclosure of whether a venturer recognises its interest in a jointly controlled entity using proportionate consolidation or the equity method (see IAS 31 Interests in Joint Ventures). Some IFRSs specifically require disclosure of particular accounting policies, including choices made by management between different policies they allow. For example, IAS 16 requires disclosure of the measurement bases used for classes of property, plant and equipment.

Each entity considers the nature of its operations and the policies that the users of its financial statements would expect to be disclosed for that type of entity. For example, users would expect an entity subject to income taxes to disclose its accounting policies for income taxes, including those applicable to deferred tax liabilities and assets. When an entity has significant foreign operations or transactions in foreign currencies, users would expect disclosure of accounting policies for the recognition of foreign exchange gains and losses.

An accounting policy may be significant because of the nature of the entity’s operations even if amounts for current and prior periods are not material. It is also appropriate to disclose each significant accounting policy that is not specifically required by IFRSs but the entity selects and applies in accordance with IAS 8.

An entity shall disclose, in the summary of significant accounting policies or other notes, the judgements, apart from those involving estimations (see paragraph 125), that management has made in the process of applying the entity’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements.

whether the substance of the relationship between the entity and a special purpose entity indicates that the entity controls the special purpose entity.

whether, in substance, particular sales of goods are financing arrangements and therefore do not give rise to revenue; and

when substantially all the significant risks and rewards of ownership of financial assets and lease assets are transferred to other entities;

In the process of applying the entity’s accounting policies, management makes various judgements, apart from those involving estimations, that can significantly affect the amounts it recognises in the financial statements. For example, management makes judgements in determining:

Some of the disclosures made in accordance with paragraph 122 are required by other IFRSs. For example, IAS 27 requires an entity to disclose the reasons why the entity’s ownership interest does not constitute control, in respect of an investee that is not a subsidiary even though more than half of its voting or potential voting power is owned directly or indirectly through subsidiaries. IAS 40 Investment Property requires disclosure of the criteria developed by the entity to distinguish investment property from owner-occupied property and from property held for sale in the ordinary course of business, when classification of the property is difficult.

Sources of estimation uncertainty

their carrying amount as at the end of the reporting period.

An entity shall disclose information about the assumptions it makes about the future, and other major sources of estimation uncertainty at the end of the reporting period, that have a significant risk of resulting in a material adjustment to the carrying amounts of assets and liabilities within the next financial year. In respect of those assets and liabilities, the notes shall include details of:

Determining the carrying amounts of some assets and liabilities requires estimation of the effects of uncertain future events on those assets and liabilities at the end of the reporting period. For example, in the absence of recently observed market prices, future-oriented estimates are necessary to measure the recoverable amount of classes of property, plant and equipment, the effect of technological obsolescence on inventories, provisions subject to the future outcome of litigation in progress, and long-term employee benefit liabilities such as pension obligations. These estimates involve assumptions about such items as the risk adjustment to cash flows or discount rates, future changes in salaries and future changes in prices affecting other costs.

The assumptions and other sources of estimation uncertainty disclosed in accordance with paragraph 125 relate to the estimates that require management’s most difficult, subjective or complex judgements. As the number of variables and assumptions affecting the possible future resolution of the uncertainties increases, those judgements become more subjective and complex, and the potential for a consequential material adjustment to the carrying amounts of assets and liabilities normally increases accordingly.

The disclosures in paragraph 125 are not required for assets and liabilities with a significant risk that their carrying amounts might change materially within the next financial year if, at the end of the reporting period, they are measured at fair value based on recently observed market prices. Such fair values might change materially within the next financial year but these changes would not arise from assumptions or other sources of estimation uncertainty at the end of the reporting period.

an explanation of changes made to past assumptions concerning those assets and liabilities, if the uncertainty remains unresolved.

the expected resolution of an uncertainty and the range of reasonably possible outcomes within the next financial year in respect of the carrying amounts of the assets and liabilities affected; and

the sensitivity of carrying amounts to the methods, assumptions and estimates underlying their calculation, including the reasons for the sensitivity;

the nature of the assumption or other estimation uncertainty;

An entity presents the disclosures in paragraph 125 in a manner that helps users of financial statements to understand the judgements that management makes about the future and about other sources of estimation uncertainty. The nature and extent of the information provided vary according to the nature of the assumption and other circumstances. Examples of the types of disclosures an entity makes are:

This Standard does not require an entity to disclose budget information or forecasts in making the disclosures in paragraph 125.

Sometimes it is impracticable to disclose the extent of the possible effects of an assumption or another source of estimation uncertainty at the end of the reporting period. In such cases, the entity discloses that it is reasonably possible, on the basis of existing knowledge, that outcomes within the next financial year that are different from the assumption could require a material adjustment to the carrying amount of the asset or liability affected. In all cases, the entity discloses the nature and carrying amount of the specific asset or liability (or class of assets or liabilities) affected by the assumption.

The disclosures in paragraph 122 of particular judgements that management made in the process of applying the entity’s accounting policies do not relate to the disclosures of sources of estimation uncertainty in paragraph 125.

Other IFRSs require the disclosure of some of the assumptions that would otherwise be required in accordance with paragraph 125. For example, IAS 37 requires disclosure, in specified circumstances, of major assumptions concerning future events affecting classes of provisions. IFRS 7 requires disclosure of significant assumptions the entity uses in estimating the fair values of financial assets and financial liabilities that are carried at fair value. IAS 16 requires disclosure of significant assumptions that the entity uses in estimating the fair values of revalued items of property, plant and equipment.

Capital

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

The entity bases these disclosures on the information provided internally to key management personnel.

when the entity has not complied with such externally imposed capital requirements, the consequences of such non-compliance.

whether during the period it complied with any externally imposed capital requirements to which it is subject.

any changes in (a) and (b) from the previous period.

summary quantitative data about what it manages as capital. Some entities regard some financial liabilities (e.g. some forms of subordinated debt) as part of capital. Other entities regard capital as excluding some components of equity (e.g. components arising from cash flow hedges).

how it is meeting its objectives for managing capital.

when an entity is subject to externally imposed capital requirements, the nature of those requirements and how those requirements are incorporated into the management of capital; and

a description of what it manages as capital;

qualitative information about its objectives, policies and processes for managing capital, including:

To comply with paragraph 134, the entity discloses the following:

An entity may manage capital in a number of ways and be subject to a number of different capital requirements. For example, a conglomerate may include entities that undertake insurance activities and banking activities and those entities may operate in several jurisdictions. When an aggregate disclosure of capital requirements and how capital is managed would not provide useful information or distorts a financial statement user’s understanding of an entity’s capital resources, the entity shall disclose separate information for each capital requirement to which the entity is subject.

Other disclosures

the amount of any cumulative preference dividends not recognised.

the amount of dividends proposed or declared before the financial statements were authorised for issue but not recognised as a distribution to owners during the period, and the related amount per share; and

An entity shall disclose in the notes:

the name of the parent and the ultimate parent of the group.

a description of the nature of the entity’s operations and its principal activities; and

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);

An entity shall disclose the following, if not disclosed elsewhere in information published with the financial statements:

TRANSITION AND EFFECTIVE DATE

An entity shall apply this Standard for annual periods beginning on or after 1 January 2009. Earlier application is permitted. If an entity adopts this Standard for an earlier period, it shall disclose that fact.

WITHDRAWAL OF IAS 1 (REVISED 2003)

This Standard supersedes IAS 1 Presentation of Financial Statements revised in 2003, as amended in 2005.

Appendix

Amendments to other pronouncements

The amendments in this appendix shall be applied for annual periods beginning on or after 1 January 2009. If an entity applies this Standard for an earlier period, these amendments shall be applied for that earlier period.

A1 [Amendment not applicable to bare, numbered Standards]

A2 [Amendment not applicable to bare, numbered Standards]

A3 In International Financial Reporting Standards (including International Accounting Standards and Interpretations), and the introductions to IFRSs, the following references are amended as described below, unless otherwise stated in this appendix.

— ‘on the face of’ is amended to ‘in’.

— ‘income statement’ is amended to ‘statement of comprehensive income’.

— ‘balance sheet’ is amended to ‘statement of financial position’.

— ‘cash flow statement’ is amended to ‘statement of cash flows’.

— ‘balance sheet date’ is amended to ‘end of the reporting period’. — ‘subsequent balance sheet date’ is amended to ‘end of the subsequent reporting period’. — ‘each balance sheet date’ is amended to ‘the end of each reporting period’. — ‘after the balance sheet date’ is amended to ‘after the reporting period’.

— ‘reporting date’ is amended to ‘end of the reporting period’. — ‘each reporting date’ is amended to ‘the end of each reporting period’. — ‘last annual reporting date’ is amended to ‘end of the last annual reporting period’.

— ‘equity holders’ is amended to ‘owners’ (except in IA 33 Earnings per Share).

— ‘removed from equity and recognised in profit or loss’ and ‘removed from equity and included in profit or loss’ are amended to ‘reclassified from equity to profit or loss as a reclassification adjustment’.

— ‘Standard or Interpretation’ is amended to ‘IFRS’. — ‘a Standard or an Interpretation’ is amended to ‘an IFRS’. — ‘Standards and Interpretations’ is amended to ‘IFRSs’ (except in paragraph 5 of IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors).

— References to the current version of IAS 7 Cash Flow Statements are amended to IAS 7 Statement of Cash Flows.

— References to the current version of IAS 10 Events after the Balance Sheet Date are amended to IAS 10 Events after the Reporting Period.

IFRS 1 First-time Adoption of International Financial Reporting Standards

A4 IFRS 1 is amended as described below.

Paragraphs 6 and 7 are amended as follows:

‘6 An entity shall prepare and present an opening IFRS statement of financial position at the date of transition to IFRSs. This is the starting point for its accounting under IFRSs. 7 An entity … Those accounting policies shall comply with each IFRS effective at the end of its first IFRS reporting period, except as specified in paragraphs 13–34B and 37.’

The Example after paragraph 8 is amended as described below.

References to the years ‘2003’ to ‘2005’ are amended to ‘20X3’ to ‘20X5’ respectively.

The paragraphs Background and Application of requirements are amended as follows:

‘Background The end of entity A’s first IFRS reporting period is 31 December 20X5. Entity A decides to present comparative information in those financial statements for one year only (see paragraph 36) … Application of requirements Entity A … in: (a) preparing and presenting its opening IFRS statement of financial position at 1 January 20X4; and …’

Paragraphs 10, 12(a) and 21 are amended as follows:

‘10 Except as described in paragraphs 13–34B, an entity shall, in its opening IFRS statement of financial position: … 12 This IFRS establishes two categories of exceptions to the principle that an entity’s opening IFRS statement of financial position shall comply with each IFRS: (a) paragraphs 13–25I grant exemptions from some requirements of other IFRSs. 21 IAS 21 The Effects of Changes in Foreign Exchange Rates requires an entity: (a) to recognise some translation differences in other comprehensive income and accumulate these in a separate component of equity; and (b) on disposal of a foreign operation, to reclassify the cumulative translation difference for that foreign operation (including, if applicable, gains and losses on related hedges) from equity to profit or loss as part of the gain or loss on disposal.’

In paragraph 32, references to the years ‘2003’ and ‘2004’ are amended to ‘20X4’ and ‘20X5’ respectively.

Paragraphs 32, 35 and 36 are amended as follows:

‘32 An entity … Instead, the entity shall reflect that new information in profit or loss (or, if appropriate, other comprehensive income ) for the year ended 31 December 20X4. 35 Except as described in paragraph 37, this IFRS does not provide exemptions from the presentation and disclosure requirements in other IFRSs. 36 To comply with IAS 1, an entity’s first IFRS financial statements shall include at least three statements of financial position, two statements of comprehensive income, two separate income statements (if presented), two statements of cash flows and two statements of changes in equity and related notes, including comparative information.’

Paragraphs 36A–36C and the headings above them are deleted.

Paragraphs 39 and 45(a) are amended as follows:

‘39 To comply with paragraph 38, an entity’s first IFRS financial statements shall include: … (a) (ii) the end … under previous GAAP. (b) a reconciliation to its total comprehensive income under IFRSs for the latest period in the entity’s most recent annual financial statements. The starting point for that reconciliation shall be total comprehensive income under previous GAAP for the same period or, if an entity did not report such a total, profit or loss under previous GAAP. (c) … 45 To comply with … (a) Each such interim financial report shall, if the entity presented an interim financial report for the comparable interim period of the immediately preceding financial year, include: (i) a reconciliation of its equity under previous GAAP at the end of that comparable interim period to its equity under IFRSs at that date; and (ii) a reconciliation to its total comprehensive income under IFRSs for that comparable interim period (current and year-to-date). The starting point for that reconciliation shall be total comprehensive income under previous GAAP for that period or, if an entity did not report such a total, profit or loss under previous GAAP.’

Paragraph 47C is deleted.

Paragraph 47H is added as follows:

‘47H IAS 1 (as revised in 2007) amended the terminology used throughout IFRSs. In addition it amended paragraphs 6, 7, 8 (Example), 10, 12(a), 21, 32, 35, 36, 39(b) and 45(a), Appendix A and paragraph B2(i) in Appendix B, and deleted paragraphs 36A–36C and 47C. An entity shall apply those amendments for annual periods beginning on or after 1 January 2009. If an entity applies IAS 1 (revised 2007) for an earlier period, the amendments shall be applied for that earlier period.’

In Appendix A, the defined terms are amended as follows:

‘first IFRS reporting period The latest reporting period covered by an entity’s first IFRS financial statements. International Financial Reporting Standards (IFRSs) Standards and Interpretations adopted by the International Accounting Standards Board (IASB). They comprise: (a) … (b) … (c) Interpretations developed by the International Financial Reporting Interpretations Committee (IFRIC) or the former Standing Interpretations Committee (SIC).’

In Appendix A, the definition of opening IFRS balance sheet is amended as follows:

‘opening IFRS statement of financial position An entity’s statement of financial position at the date of transition to IFRSs.’

In Appendix A, the definition of reporting date is deleted.

In Appendix B, paragraph B2(i) is amended as follows:

‘B2 If a first-time adopter … (i) If the first-time adopter recognised goodwill under previous GAAP as a deduction from equity: (i) it shall not recognise that goodwill in its opening IFRS statement of financial position. Furthermore, it shall not reclassify that goodwill to profit or loss if it disposes of the subsidiary or if the investment in the subsidiary becomes impaired.’

IFRS 4 Insurance Contracts

A5 In IFRS 4, paragraphs 30 and 39A(a) are amended as follows:

‘30 In some accounting models … The related adjustment to the insurance liability (or deferred acquisition costs or intangible assets) shall be recognised in other comprehensive income if, and only if, the unrealised gains or losses are recognised in other comprehensive income. This practice … 39A To comply with … (a) a sensitivity analysis that shows how profit or loss and equity would have been affected if changes in the relevant risk variable that were reasonably possible at the end of the reporting period had occurred; the methods and assumptions used in preparing the sensitivity analysis; and any changes from the previous period in the methods and assumptions used. However …’

Paragraph 41B is added as follows:

‘41B IAS 1 (as revised in 2007) amended the terminology used throughout IFRSs. In addition it amended paragraph 30. An entity shall apply those amendments for annual periods beginning on or after 1 January 2009. If an entity applies IAS 1 (revised 2007) for an earlier period, the amendments shall be applied for that earlier period.’

IFRS 5 Non-current Assets Held for Sale and Discontinued Operations

A6 IFRS 5 is amended as described below.

In paragraph 3, ‘(as revised in 2003)’ is deleted.

In paragraph 28, ‘in the same income statement caption’ is amended to ‘in the same caption in the statement of comprehensive income’.

Paragraph 33A is added as follows:

‘33A If an entity presents the components of profit or loss in a separate income statement as described in paragraph 81 of IAS 1 (as revised in 2007), a section identified as relating to discontinued operations is presented in that separate statement.’

In paragraph 38, ‘recognised directly in equity’ is amended to ‘recognised in other comprehensive income’.

Paragraph 44A is added as follows:

‘44A IAS 1 (as revised in 2007) amended the terminology used throughout IFRSs. In addition it amended paragraphs 3 and 38, and added paragraph 33A. An entity shall apply those amendments for annual periods beginning on or after 1 January 2009. If an entity applies IAS 1 (revised 2007) for an earlier period, the amendments shall be applied for that earlier period.’

In Appendix A, the definition of current asset is amended as follows:

‘An entity shall classify an asset as current when:

(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.’

IFRS 7 Financial Instruments: Disclosures

A7 IFRS 7 is amended as described below.

The heading above paragraph 20 is amended as follows:

‘Statement of comprehensive income’

Paragraph 20 is amended as follows:

‘20 An entity shall disclose the following items of income, expense, gains or losses either in the statement of comprehensive income or in the notes: (a) net gains or net losses on: (i) … (ii) available-for-sale financial assets, showing separately the amount of gain or loss recognised in other comprehensive income during the period and the amount reclassified from equity to profit or loss for the period; (iii) …’

Paragraph 21 is amended as follows:

‘21 In accordance with paragraph 117 of IAS 1 Presentation of Financial Statements (as revised in 2007), an entity discloses, in the summary of significant accounting policies, the measurement basis (or bases) used in preparing the financial statements and the other accounting policies used that are relevant to an understanding of the financial statements.’

Paragraph 23(c) and (d) is amended as follows:

‘23 For cash flow hedges, an entity shall disclose: … (c) the amount that was recognised in other comprehensive income during the period; (d) the amount that was reclassified from equity to profit or loss for the period, showing the amount included in each line item in the statement of comprehensive income; and …’

In paragraph 27(c), ‘in equity’ is amended to ‘in other comprehensive income’.

Paragraph 44A is added as follows:

‘44A IAS 1 (as revised in 2007) amended the terminology used throughout IFRSs. In addition it amended paragraphs 20, 21, 23(c) and (d), 27(c) and B5 of Appendix B. An entity shall apply those amendments for annual periods beginning on or after 1 January 2009. If an entity applies IAS 1 (revised 2007) for an earlier period, the amendments shall be applied for that earlier period.’

Paragraph B5 is amended as follows:

‘B5 … Paragraph 122 of IAS 1 (as revised in 2007) also requires entities to disclose, in the summary of significant accounting policies or other notes, the judgments, apart from those involving estimations, that management has made in the process of applying the entity’s accounting policies and that have the most significant effect on the amounts recognised in the financial statements.’

In paragraph B14 of Appendix B, ‘balance sheet amount’ is amended to ‘amount in the statement of financial position’.

IFRS 8 Operating Segments

A8 In IFRS 8, paragraphs 21 and 23(f) are amended as follows:

‘21 To give … Reconciliations of the amounts in the statement of financial position for reportable segments to the amounts in the entity’s statement of financial position are required for each date at which a statement of financial position is presented. Information for prior periods shall be restated as described in paragraphs 29 and 30. 23 An entity shall … (f) material items of income and expense disclosed in accordance with paragraph 97 of IAS 1 Presentation of Financial Statements (as revised in 2007);’

Paragraph 36A is added as follows:

‘36A IAS 1 (as revised in 2007) amended the terminology used throughout IFRSs. In addition it amended paragraph 23(f). An entity shall apply those amendments for annual periods beginning on or after 1 January 2009. If an entity applies IAS 1 (revised 2007) for an earlier period, the amendments shall be applied for that earlier period.’

IAS 7 Statement of Cash Flows

A9 IAS 7 is amended as described below.

The title is amended to ‘Statement of Cash Flows’.

The title (as amended) above the Objective is footnoted as follows: ‘In September 2007 the IASB amended the title of IAS 7 from Cash Flow Statements to Statement of Cash Flows as a consequence of the revision of IAS 1 Presentation of Financial Statements in 2007.’

In paragraph 32, ‘the income statement’ is amended to ‘profit or loss’.

IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors

A10 IAS 8 is amended as described below.

Paragraph 5 is amended as follows:

— in the definition of International Financial Reporting Standards (IFRSs), ‘originated’ is amended to ‘developed’.

— in the definition of Material, ‘of users taken’ is amended to ‘that users make’.

IAS 10 Events after the Reporting Period

A11 IAS 10 is amended as described below.

The title is amended to ‘Events after the Reporting Period’.

In paragraph 21, ‘of users taken’ is amended to ‘that users make’.

IAS 11 Construction Contracts

A12 In IAS 11, in paragraphs 26, 28 and 38, ‘the income statement’ is amended to ‘profit or loss’.

IAS 12 Income Taxes

A13 IAS 12 is amended as described below.

The third paragraph of the ‘Objective’ in IAS 12 is amended as follows:

‘… For transactions and other events recognised outside profit or loss (either in other comprehensive income or directly in equity), any related tax effects are also recognised outside profit or loss (either in other comprehensive income or directly in equity, respectively).’

In paragraphs 22(b), 59, 60 and 65, ‘the income statement’ is amended to ‘profit or loss’, and in paragraph 81(g)(ii) ‘the income statement’ is amended to ‘profit or loss’.

Paragraph 23 is amended as follows:

‘23 … In accordance with paragraph 61A, the deferred tax is charged directly to the carrying amount of the equity component. In accordance with paragraph 58, subsequent changes in the deferred tax liability are recognised in profit or loss as deferred tax expense (income).’

In paragraph 52, in the notes at the end of Example B and Example C, ‘paragraph 61’ is amended to ‘paragraph 61A’ and ‘charged directly to equity’ is amended to ‘recognised in other comprehensive income’.

The heading above paragraph 58 and paragraph 58 are amended as follows:

‘Items recognised in profit or loss 58 Current and deferred tax shall be recognised as income or an expense and included in profit or loss for the period, except to the extent that the tax arises from: (a) a transaction or event which is recognised, in the same or a different period, outside profit or loss, either in other comprehensive income or directly in equity (see paragraphs 61A to 65); …’

In paragraph 60, ‘charged or credited to equity’ is amended to ‘recognised outside profit or loss’.

In the heading above paragraph 61, ‘credited or charged directly to equity’ is amended to ‘recognised outside profit or loss’.

Paragraph 61 is deleted and paragraph 61A is added as follows:

‘61A Current tax and deferred tax shall be recognised outside profit or loss if the tax relates to items that are recognised, in the same or a different period, outside profit or loss. Therefore, current tax and deferred tax that relates to items that are recognised, in the same or a different period: (a) in other comprehensive income, shall be recognised in other comprehensive income (see paragraph 62). (b) directly in equity, shall be recognised directly in equity (see paragraph 62A).’

Paragraphs 62 and 63 are amended and paragraph 62A is added as follows:

‘62 International Financial Reporting Standards require or permit particular items to be recognised in other comprehensive income. Examples of such items are: (a) a change in carrying amount arising from the revaluation of property, plant and equipment (see IAS 16); and (b) [deleted] (c) exchange differences arising on the translation of the financial statements of a foreign operation (see IAS 21). (d) [deleted] 62A International Financial Reporting Standards require or permit particular items to be credited or charged directly to equity. Examples of such items are: (a) an adjustment to the opening balance of retained earnings resulting from either a change in accounting policy that is applied retrospectively or the correction of an error (see IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors); and (b) amounts arising on initial recognition of the equity component of a compound financial instrument (see paragraph 23). 63 In exceptional circumstances it may be difficult to determine the amount of current and deferred tax that relates to items recognised outside profit or loss (either in other comprehensive income or directly in equity). This may be the case, for example, when: (a) … (b) a change in the tax rate … to an item that was previously recognised outside profit or loss; or (c) an entity … and the deferred tax asset relates (in whole or in part) to an item that was previously recognised outside profit or loss. In such cases, the current and deferred tax related to items that are recognised outside profit or loss are based on a reasonable pro rata allocation of the current and deferred tax of the entity in the tax jurisdiction concerned, or other method that achieves a more appropriate allocation in the circumstances.’

In paragraph 65, ‘credited or charged to equity’ is amended to ‘recognised in other comprehensive income’.

Paragraph 68C is amended as follows:

‘68C As noted … (a) a transaction or event that is recognised, in the same or a different period, outside profit or loss, or (b) a business combination. …’

Paragraph 77 is amended and paragraph 77A is added as follows:

‘77 The tax expense (income) related to profit or loss from ordinary activities shall be presented in the statement of comprehensive income. 77A If an entity presents the components of profit or loss in a separate income statement as described in paragraph 81 of IAS 1 Presentation of Financial Statements (as revised in 2007), it presents the tax expense (income) related to profit or loss from ordinary activities in that separate statement.’

Paragraph 81 is amended as follows:

‘81 The following shall also be disclosed separately: (a) the aggregate current and deferred tax relating to items that are charged or credited directly to equity (see paragraph 62A); (ab) the amount of income tax relating to each component of other comprehensive income (see paragraph 62 and IAS 1 (as revised in 2007)); (b) [deleted]; …’

Paragraph 92 is added as follows:

‘92 IAS 1 (as revised in 2007) amended the terminology used throughout IFRSs. In addition it amended paragraphs 23, 52, 58, 60, 62, 63, 65, 68C, 77 and 81, deleted paragraph 61 and added paragraphs 61A, 62A and 77A. An entity shall apply those amendments for annual periods beginning on or after 1 January 2009. If an entity applies IAS 1 (revised 2007) for an earlier period, the amendments shall be applied for that earlier period.’

IAS 14 Segment Reporting

A14 IAS 14 is amended as described below.

Paragraphs 2, 52A and 54 are amended as follows:

‘2 A complete set of financial statements includes a statement of financial position, a statement of comprehensive income, a statement of cash flows, a statement of changes in equity, and notes, as provided in IAS 1 Presentation of Financial Statements (as revised in 2007). When a separate income statement is presented in accordance with IAS 1, it is part of that complete set. 52A An entity…all operations that had been classified as discontinued at the end of the latest reporting period presented. 54 An example of a measure of segment performance above segment result in the statement of comprehensive income is gross margin on sales. Examples of measures of segment performance below segment result in the statement of comprehensive income are profit or loss from ordinary activities (either before or after income taxes) and profit or loss.’

Paragraph 85 is added as follows:

‘85 IAS 1 (as revised in 2007) amended the terminology used throughout IFRSs. In addition it amended paragraph 2. An entity shall apply IAS 1 (revised 2007) for annual periods beginning on or after 1 January 2009. If an entity applies IAS 1 (revised 2007) for an earlier period, the amendments shall be applied for that earlier period.’

IAS 16 Property, Plant and Equipment

A15 IAS 16 is amended as described below.

Paragraphs 39 and 40 are amended as follows:

‘39 If an asset’s carrying amount is increased as a result of a revaluation, the increase shall be recognised in other comprehensive income and accumulated in equity under the heading of revaluation surplus. However … 40 If an asset’s … However, the decrease shall be recognised in other comprehensive income to the extent of any credit balance existing in the revaluation surplus in respect of that asset. The decrease recognised in other comprehensive income reduces the amount accumulated in equity under the heading of revaluation surplus.’

In paragraph 73(e)(iv), ‘recognised or reversed directly in equity’ is amended to ‘recognised or reversed in other comprehensive income’.

Paragraph 81B is added as follows:

‘81B IAS 1 Presentation of Financial Statements (as revised in 2007) amended the terminology used throughout IFRSs. In addition it amended paragraphs 39, 40 and 73(e)(iv). An entity shall apply those amendments for annual periods beginning on or after 1 January 2009. If an entity applies IAS 1 (revised 2007) for an earlier period, the amendments shall be applied for that earlier period.’

IAS 19 Employee Benefits

A16 IAS 19 is amended as described below.

In paragraph 69, ‘at each successive balance sheet date’ is amended to ‘at the end of each successive reporting period’.

Paragraphs 93A–93D are amended as follows:

‘93A If, as permitted by paragraph 93, an entity adopts a policy of recognising actuarial gains and losses in the period in which they occur, it may recognise them in other comprehensive income, in accordance with paragraphs 93B–93D, providing … 93B Actuarial gains and losses recognised in other comprehensive income as permitted by paragraph 93A shall be presented in the statement of comprehensive income. 93C An entity that recognises actuarial gains and losses in accordance with paragraph 93A shall also recognise any adjustments arising from the limit in paragraph 58(b) in other comprehensive income. 93D Actuarial gains and losses and adjustments arising from the limit in paragraph 58(b) that have been recognised in other comprehensive income shall be recognised immediately in retained earnings. They shall not be reclassified to profit or loss in a subsequent period.’

In paragraph 105 and in the third paragraph of the Example illustrating paragraph 106, ‘the income statement’ is amended to ‘profit or loss’.

Paragraph 120A is amended as follows:

‘120A An entity shall disclose the following information about defined benefit plans: … (h) the total amount recognised in other comprehensive income for each of the following: … (i) for entities that recognise actuarial gains and losses in other comprehensive income in accordance with paragraph 93A, the cumulative amount of actuarial gains and losses recognised in other comprehensive income.’

Paragraph 161 is added as follows:

‘161 IAS 1 (as revised in 2007) amended the terminology used throughout IFRSs. In addition it amended paragraphs 93A–93D, 106 (Example) and 120A. An entity shall apply those amendments for annual periods beginning on or after 1 January 2009. If an entity applies IAS 1 (revised 2007) for an earlier period, the amendments shall be applied for that earlier period.’

IAS 20 Accounting for Government Grants and Disclosure of Government Assistance

A17 IAS 20 is amended as described below.

In paragraphs 14 and 15, ‘the income statement’ is amended to ‘profit or loss’.

In paragraph 28, ‘for the purpose of balance sheet presentation’ is amended to ‘for presentation purposes in the statement of financial position’.

Paragraph 29A is added as follows:

‘29A If an entity presents the components of profit or loss in a separate income statement as described in paragraph 81 of IAS 1 (as revised in 2007), it presents grants related to income as required in paragraph 29 in that separate statement.’

Paragraph 42 is added as follows:

‘42 IAS 1 (as revised in 2007) amended the terminology used throughout IFRSs. In addition it added paragraph 29A. An entity shall apply those amendments for annual periods beginning on or after 1 January 2009. If an entity applies IAS 1 (revised 2007) for an earlier period, the amendments shall be applied for that earlier period.’

IAS 21 The Effects of Changes in Foreign Exchange Rates

A18 IAS 21 is amended as described below.

In paragraph 7, ‘… a cash flow statement of cash flows arising …’ is amended to ‘… a statement of cash flows of the cash flows arising …’

In the heading above paragraph 23, ‘Reporting at subsequent balance sheet dates’ is amended to ‘Reporting at the ends of subsequent reporting periods’.

In paragraph 27, ‘reported initially in equity’ is amended to ‘recognised initially in other comprehensive income’.

In paragraphs 30 and 31, ‘recognised directly in equity’ and ‘recognised in equity’ are amended to ‘recognised in other comprehensive income’.

In paragraph 32, ‘recognised initially in a separate component of equity and recognised in profit or loss’ is amended to ‘recognised initially in other comprehensive income and reclassified from equity to profit or loss’.

In paragraph 33, ‘reclassified to the separate component of equity’ is amended to ‘recognised in other comprehensive income’.

Paragraph 37 is amended as follows:

‘37 The effect … Exchange differences arising from the translation of a foreign operation previously recognised in other comprehensive income in accordance with paragraphs 32 and 39(c) are not reclassified from equity to profit or loss until the disposal of the operation.’

In paragraph 39(a), ‘at the closing rate at the date of that balance sheet’ is amended to ‘at the closing rate at the date of that statement of financial position’.

In paragraph 39(b), ‘each income statement’ is amended to ‘each statement of comprehensive income or separate income statement presented’.

In paragraph 39(c), ‘as a separate component of equity’ is amended to ‘in other comprehensive income’.

Paragraphs 41, 45, 46, 48 and 52 are amended as follows:

‘41 The exchange differences referred to in paragraph 39(c) result from: (a) translating income and expenses at the exchange rates at the dates of the transactions and assets and liabilities at the closing rate. … These exchange differences are not recognised in profit or loss because the changes in exchange rates have little or no direct effect on the present and future cash flows from operations. The cumulative amount of the exchange differences is presented in a separate component of equity until disposal of the foreign operation. When the exchange differences relate to a foreign operation that is consolidated but not wholly-owned … 45 The incorporation … Accordingly, in the consolidated financial statements of the reporting entity, such an exchange difference is recognised in profit or loss or, if it arises from the circumstances described in paragraph 32, it is recognised in other comprehensive income and accumulated in a separate component of equity until the disposal of the foreign operation. 46 When … IAS 27 allows the use of a different date provided that the difference is no greater than three months and adjustments are made for the effects of any significant transactions or other events that occur between the different dates. … 48 On the disposal of a foreign operation, the cumulative amount of the exchange differences relating to that foreign operation, recognised in other comprehensive income and accumulated in a separate component of equity, shall be reclassified from equity to profit or loss (as a reclassification adjustment) when the gain or loss on disposal is recognised (see IAS 1 Presentation of Financial Statements (as revised in 2007)). 52 An entity shall disclose: … (b) net exchange differences recognised in other comprehensive income and accumulated in a separate component of equity, and a reconciliation of the amount of such exchange differences at the beginning and end of the period.’

Paragraph 60A is added as follows:

‘60A IAS 1 (as revised in 2007) amended the terminology used throughout IFRSs. In addition it amended paragraphs 27, 30–33, 37, 39, 41, 45, 48 and 52. An entity shall apply those amendments for annual periods beginning on or after 1 January 2009. If an entity applies IAS 1 (revised 2007) for an earlier period, the amendments shall be applied for that earlier period.’

IAS 24 Related Party Disclosures

A19 In IAS 24, in paragraph 19, ‘on the balance sheet’ is amended to ‘in the statement of financial position’.

IAS 27 Consolidated and Separate Financial Statements

A20 IAS 27 is amended as described below.

In paragraph 4, in the definition of the cost method, ‘accumulated profits’ is amended to ‘retained earnings’.

Paragraphs 26, 27, 30 and 40(e) are amended as follows:

‘26 The financial statements of the parent and its subsidiaries used in the preparation of the consolidated financial statements shall be prepared as of the same date. When the end of the reporting period of the parent is different from that of a subsidiary, the subsidiary prepares, for consolidation purposes, additional financial statements as of the same date as the financial statements of the parent unless it is impracticable to do so. 27 When … the financial statements of a subsidiary used in the preparation of consolidated financial statements are prepared as of a date different from that of the parent, adjustments shall be made for the effects of significant transactions or events that occur between that date and the date of the parent’s financial statements. In any case, the difference between the end of the reporting period of the subsidiary and that of the parent shall be no more than three months. The length of the reporting periods and any difference between the ends of the reporting periods shall be the same from period to period. 30 The income … recognised in other comprehensive income in accordance with IAS 21 The Effects of Changes in Foreign Exchange Rates, is reclassified to consolidated profit or loss as a reclassifica