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Examine The Provisions And Principles Of International Accounting Standard 1 (Ias 1)

2070 words - 9 pages

CAPE COAST PLOYTECHNIC

NAME: GABRIEL NMAI
REG. NO: 021201226
COURSE: HND ACCOUNTANCY
CLASS: ACCOUNTING 1B
TITTLE: PRINCIPLES OF FINANCIAL ACCOUNTING ASSIGNMENT

RESEARCH QUESTION
EXAMINE THE PROVISIONS AND PRINCIPLES OF INTERNATIONAL ACCOUNTING STANDARD 1 (IAS 1)

What is IAS 1?
The International Accounting Standards Board (IASB) provides a conceptual framework for the preparation and presentation of financial statements.
This currently consists of:
30 standards (IAS 1 – IAS 41) and
11 interpretations (SIC 7 – SIC 32).
IAS-1: Presentation of Financial Statement Paragraph 7 of IAS -1 states that general purpose financial statements are those intended to ...view middle of the document...

c) Accrual basis of accounting: Financial statements, except for the statement of cash flows, must be prepared using the accrual basis of accounting.
d) Consistency: Paragraph 45, requires that the presentation and classification of items in the financial statements shall be retained.
e) Materiality and aggregation: Paragraph 29 states that each material class of similar items must be presented separately in the financial statements and items of dissimilar must be presented separately unless they are not material.
f) Offsetting: Paragraph 32, states that assets and liabilities, and income and expenses, shall not be offset unless required or permitted by a standard or interpretation.
g) Frequency of reporting: Financial statements must be prepared at least annually.
h) Comparative information: Comparative information to be presented for all items of financial statements in respect of previous financial period unless specifically exempted by IFRS. This extends to the narrative informative too.
The spirit of the principles is ensure the relevance and reliability of the financial statements .
Statement of financial position
Statement of financial position is the new name of balance sheet. It is shows the assets and the corresponding sources of an entity on a particular date. It is a tabular manifestation of the basis accounting equation i.e. Assets = Liabilities + Equity. Minimum items on the face of the statement of financial position [IAS 1.54]
(a) property, plant and equipment
(b) investment property
(c) intangible assets
(d) financial assets (excluding amounts shown under (e), (h), and (i))
(e) investments accounted for using the equity method
(f) biological assets
(g) Inventories
(h) trade and other receivables
(i) cash and cash equivalents
(j) assets held for sale
(k) trade and other payables
(l) Provisions
(m) financial liabilities (excluding amounts shown under (k) and (l))
(n) liabilities and assets for current tax, as defined in IAS 12

(o) deferred tax liabilities and deferred tax assets, as defined in IAS 12

(p) liabilities included in disposal groups
(q) non-controlling interests, presented within equity and
(r) issued capital and reserves attributable to owners of the parent
Statement of Comprehensive Income
Statement of comprehensive income is the new name for the income statement or profit and loss account. Paragraph 81 gives two options for preparing the statement of comprehensive income
• Option 1: Single statement of comprehensive income
• Option 2: Two separate statements: First one presents just income statement and the second one begins with profit or loss and displays other comprehensive incomes.
The components of other comprehensive income include:
 changes in revaluation surplus (IAS 16 and IAS 38)
 actuarial gains and losses on defined benefit plans recognised in accordance with IAS 19
 gains and losses arising from translating the financial statements of a foreign operation...

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