(Summary) Ind AS 1

Presentation of Financial Statements

Objective: is to prescribe the basis for presentation of general purpose FS to ensure comparability:

  • With the entity’s FS of previous periods and
  • With the FS of other entities.

Apply in preparing and presenting general purpose FS.

Not applicable to structure and content of condensed interim FS.

However, structure and content detailed in para 15 to 35 applies to condensed set of financial statements.

  • For Eg. As per para 16, Full/ Condensed FS both needs to make explicit and unreserved statement of compliance with Ind AS.

Non-profit entities should amend the descriptions used for particular line items in the FS and for the FS themselves.

  1. Notes
  2. Ind AS
  3. General Purpose Financial Statements
  4. Other Comprehensive Income

Ind AS: Standards prescribed under Section 133 of the Companies Act, 2013.

OCI: Comprises items of income and expense (including reclassification adjustments) that are not recognised in profit or loss as required or permitted by other Ind AS.

Components of Other Comprehensive Income:

  1. Revaluation Surplus
  2. Actuarial Gains or Loss
  3. Translation Reserve
  4. Effective Portion of Cash Flow Hedge
  5. Δ FVTOCI Investments
  6. Δ Equity Instruments at FVTOCI
  7. Δ FVTPL Liability due to Δ Credit Risk
  8. Share in OCI of subsidiary, associate, joint arrangements
  • Provide information about (a) financial position, (b) financial performance and (c) cash flows of an entity
  • Provide information about an entity’s Assets, Liabilities, Equity, Income and expenses, including gains and losses, Contributions by and distributions to owners in their capacity as owners, & Cash flows.
  • BS, SOPL, SOCIE, SOCF, notes, Accounting policies, other info, comparative information
  • Single SOPL followed by OCI
  • Equal prominence to all information
  • Financial review by Management may include review of Main factors and influences determining financial performance, Entity’s sources of funding and its targeted ratio of liabilities to equity, Entity’s resources not recognised in the BS in accordance with Ind ASs
  • Presentation of True and Fair View and compliance with Ind ASs and statement of such compliance in the notes
  • Entity cannot rectify inappropriate accounting policies either by Disclosure of the accounting policies used or by notes or explanatory material.
  • If management concludes that compliance with Ind AS would be so misleading that it would conflict with objectives of FS, then they can depart from the requirements of Ind AS and it shall disclose such departure and its effects in FS.

Going Concern assumption, if not followed shall explicitly state the same and reasons thereof.

Use Accrual Basis of Accounting, except in statement of cash flows

  • Present separately each material class of similar items.
  • Separately present items of dissimilar nature or function unless they are immaterial

Don’t offset assets and liabilities or income and expenses unless required or permitted by an Ind AS

  • Frequency of reporting – At least annually
  • Present comparative information in respective of the preceding period for all amount reported in current year’s FS
  • An entity shall present a third BS if the new Accounting policies are applied retrospectively and it has material effect
  • If an entity changes the presentation or classification of items in its financial statements, it shall reclassify comparative amounts
  • An entity shall retain the consistency in the preparation of FS.
  • Various items to be presented in BS are given.
  • Present non-current assets and current assets and Non-current liabilities and current liabilities as separate classification.
  • Classification criteria for Current assets and Current Liabilities.
  • Sub classification of the items provided in FS is required.
  • SOPL – list of items to be presented in it.
  • No classification as extra-ordinary
  • Amount of income tax relating to OCI
  • Reclassification adjustments related to OCI
  • When items of income or expense are material, an entity shall disclose their nature and amount separately
  • Present an analysis of expenses recognised in profit or loss using a classification based on the nature of expense method
  • SOCIE- list of information to be provided
  • SOCF- in accordance with Ind AS 7
  • Notes – Accounting policies
    • Disclosures
    • Info for understanding FS
    • Cross reference required
  • Accounting policies
  • Presentation of Judgements in applying the Accounting policies
  • Assumption about futures, estimation that have significant risk of resulting in material adjustments to the carrying amount of assets and liabilities.
  • Information regarding capital to evaluate the entity’s objectives, policies and processes for managing capital.
  • Financial instruments classified as equity
  • Disclosure regarding dividends –
  • amount of dividends proposed or declared
  • related amount per share
  • cumulative preference dividends not recognised.

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