Notes PRESENTATION OF FINANCIAL STATEMENTS

Chapter 3 – Presentation of Financial Statements Page 43

5.3.6 Additional disclosures

A number of additional disclosures are required by IAS 1 to ensure that users of the financial statements understand the basis on which the information presented in the financial statements has been prepared. These additional disclosures which should be presented include: the measurement basis used in the preparation of the financial statements, judgements that have been made in applying an entity’s accounting policies, and assumptions that an entity has made over the uncertainty of making estimations. [IAS 1.117, 1.122, 1.125] 6 Chapter Review This chapter has been concerned with the presentation of financial statements and has covered:  IAS 1s objective, scope, definitions and disclosure requirements;  what makes up a complete set of the financial statements;  the content of each element within the financial statements; and  the overall considerations that need to be addressed in preparing a set of financial statements. Chapter 3 – Presentation of Financial Statements Page 44 7 Self Test Questions Chapter 3 1. Are the following statements in relation to materiality true or false, according to IAS1 Presentation of financial statements? 1 Materiality of items depends on their individual or collective influence on the economic decisions of users. 2 Materiality of an item depends on its absolute size and nature. Statement 1 Statement 2 A False False B False True C True False D True True 2. According to IAS1 Presentation of financial statements, the notes within the financial statements contain information in addition to that presented in which TWO of the following? A Report on sustainability B Chairmans statement C Statement of financial position D Statement of financial performance 3. Are the following statements true or false, according to IAS1 Presentation of financial statements? 1 Dividends paid should be recognised in the statement of comprehensive income. 2 A loss on disposal of assets should be recognised in the statement of changes in equity. Statement 1 Statement 2 A False False B False True C True False D True True