IFRS – IAS 1: Presentation of financial statements
IFRS Guide > IAS 1
The International Accounting Standards Committee (IASC) released International Accounting Standard 1 (IAS 1) to address the topic of the presentation of financial statements. Financial statements prepared on international standards have a specific format in which they must follow so that the users of them may be able to easily understand and compare them. This IAS discusses what each financial statement is, what is included in it, as well as specific rules as to what may and may not be done within them. This is important so that shareholders may be able to read varying financial statements and have one uniform standard for how to interpret the data.
IAS are principles based standards, rather than strict rules based standards that govern international accounting. IAS standards differ from IFRS standards in that they were introduced prior to 2001, whereas IFRS were produced after this date by the IASB, or the International Accounting Standards Board. When determining the hierarchy of these, the IAS is considered to be the building blocks in which newer and more relevant IFRS are founded and therefore IFRS is more authoritative when these conflict.
Check out more high level explanations of the IASB IFRS in our Guide to IFRS International Financial Reporting Standards!
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Don’t forget that financial statements can be analysed either by nature (raw materials, staffing costs, depreciation, etc.) or by function (cost of sales, selling, administrative, etc) per the accounting standard.
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IAS 1 also says that a complete set of financials is as follows:
1 – statement of financial position
2 – Statement of comprehensive income
3 – statement of changes in equity
4 – statement of cash flows
5 – accounting policies and notes
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