PAS 1 Presentation of FS

Objectives of Standards 

  • To prescribe basis for preparation of FS.
  • Ensure comparability of FS for Prior Periods and Other Entities.


  • Applies to  all general purpose FS in accordance with PFRS
  • Does not apply to condensed interim FS prepared in accordance with PAS 34 Interim Financial Reporting

PAS 30 disclosures in the FS of Banks and similar Financial Institutions.

Purpose of Financial Statements

Objective of Financial Statements to provide information about financial position, financial performance, and cash flows of an entity that is  useful for to a wide range of users in making economic decisions.

Five Components of FS

  1. Statement of Financial Position – Balance Sheet
  2. Statement of Comprehensive Income – Income Statement
  3. Statement of Changes in Equity
  4. Statement  of Cash Flows
  5. Summary of Accounting Policies and Explanatory Notes or Notes to FS

Overall Considerations of FS

  1. Fair Presentation and compliance with PFRS
  2. Going Concern
  3. Accrual Basis of Accounting
  4. Consistency
  5. Materiality and Aggregation
  6. Offsetting
  7. Comparative Information

Mnemonics – FaGACMOC

  • Fair Presentation – in accordance with PFRS recognition and criteria to achieve fair presentation or faithfully represented. Application of PFRS with additional disclosures. 100% compliance and unreserved statement. Inappropriate accounting policies cannot be rectified either by disclosure of accounting policies used or by notes or explanatory material.  In extremely rare circumstances the entity shall depart if management feels that it will be misleading and that relevant regulatory framework requires. 
  • Going Concern – Assessment of the  ability to continue as a going concern must be made at each reporting date. FS should be prepared on going concern basis unless that business will cease or there is no realistic alternative but to liquidate.
  • Accrual Basis – applied in preparation of FS except on Cash Flow Statement.
  • Consistency – should be follow absolutely, if FIFO applied from Year 1 then it should be follow in Year 2.
  • Materiality – present separately each material class of similar items and present separately items of a dissimilar nature or function unless immaterial.
  • Offsetting – Asset and Liabilities should not be offset unless offsetting is specifically required or permitted by another PAS.
  • Comparative Information –  at least one prior period in presentations.

About Jonathan Ruiz CPA

Entrepreneur, CPA Mentor, Stock market Newbie Mentor, Influential Author and Master's Degree in International Business graduate in Hult International Business School, UK. A father of two lovely daughters.
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