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- 2023 Issued Standard – IAS 1
The 2023 Issued Standards include all amendments issued up to and including 1 January 2023.
Registration is required to access the free version of the Issued Standards, which do not include additional documents that accompany the full standard (such as illustrative examples, implementation guidance and basis for conclusions).
Summary
A complete set of financial statements includes:
- A statement of financial position (balance sheet) at the end of the period
- A statement of profit or loss and other comprehensive income (income statement) for the period
- A statement of changes in equity for the period
- A statement of cash flows (cash flow statement) for the period
- Notes to the accounts.
The names of the main statements are not mandatory.
IAS 1 Revised also requires a statement of financial position at the start of the earliest comparative period where there has been a retrospective adjustment to the accounts or reclassification of items.
The statement of profit or loss and other comprehensive income, as the name suggests, presents profit and loss for the period as well as other comprehensive income. Other comprehensive income includes income and expenses not recognised in profit or loss such as revaluation surpluses. The statement of profit or loss and other comprehensive income may be presented either as one statement or a separate statement of profit or loss and statement showing other comprehensive income.
The standard provides guidance on the form and content of the financial statements and the underlying accounting concepts. It also requires financial statements to present fairly the position, performance and cash flows of an entity. This is normally achieved by the application of IFRS.
Current proposals
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ED/2019/7 General Presentation and Disclosures
ED/2019/7 General Presentation and Disclosures was issued in December 2019. This is the exposure draft of a proposed new standard that would replace IAS 1. The standard would carry forward most of the current requirements of IAS 1 and add supplementary requirements, including:
- Categorising items in profit or loss as operating, investing or financing
- Requiring additional profit subtotals
- Distinguishing between integral and non-integral associates and joint ventures
- Removing the choice of how to present cash flows from dividends and interest
- Requiring additional disclosure about unusual items
- Providing disclosure of management performance measures.
Recent amendments
All amendments issued up to and including the publication date of 1 January 2022 are included within the IFRS Foundation’s latest version of the issued standard: 2022 Issued Standard – IAS 1. Issued amendments may, therefore, have a mandatory effective date that is later than 1 January 2022 – see below for details.
Any amendments issued after 1 January 2022 will not be included in the IFRS Foundation’s 2022 Issued Standards but will be listed below and identified as such.
See the Corporate Reporting Faculty’s annual IFRS factsheets for a more detailed discussion of recent IFRS amendments.
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Non-current Liabilities with Covenants amendment to IAS 1
Mandatory date: Annual periods beginning on or after 1 January 2024. Earlier application is permitted.
Issue date: October 2022 (not included within the IFRS Foundation’s 2022 Issued Standards).
The amendments specify that the classification of a liability as current or non-current is only affected by covenants that an entity must comply with on or before the end of the reporting period.
They also require disclosure of information that allows users of financial statements to understand the risk that non-current liabilities with covenants could become repayable within 12 months.This amendment has been endorsed for use in the UK. It is not yet endorsed for use in the EU as at 25 July 2023. Read more on UK endorsement and EU endorsement of IFRS standards.
For a more detailed discussion of the amendment, read the faculty’s factsheet:
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Classification of Liabilities as Current or Non-current amendment to IAS 1
Mandatory date: Annual periods beginning on or after 1 January 2024 (deferred from 2023). Earlier application is permitted.
IAS 1 is amended to clarify that the classification of liabilities as current or non-current should be based on rights that exist at the end of the reporting period. Expectations about whether an entity will exercise a right to defer settlement of a liability do not affect its classification. The amendments also clarify that settlement is the transfer of cash, equity instruments, other assets or services.
The deferral of the effective date to 2024 is included in the Non-current Liabilities with Covenants amendment to IAS 1.
This amendment has been endorsed for use in the UK. It is not yet endorsed for use in the EU as at 25 July 2023. Read more on UK endorsement and EU endorsement of IFRS standards.
For a more detailed discussion of the amendment, read the faculty’s factsheet:
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Disclosure of Accounting Policies amendment to IAS 1
Mandatory date: Annual periods beginning on or after 1 January 2023. Earlier application is permitted.
The amendments to IAS 1:
- Require an entity to disclose material accounting policy information rather than significant accounting policies.
- Explain that accounting policy information is material if, together with other information in the financial statements, it can reasonably be expected to influence decisions that primary users make.
- Provide examples of material accounting policies.
- Clarify that accounting policy information relating to immaterial transactions need not be disclosed.
For a more detailed discussion of the amendment, read the faculty’s factsheet:
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IFRS 17 Insurance Contracts amendment to IAS 1
Mandatory date: Annual periods beginning on or after 1 January 2023. Earlier application is permitted.
IAS 1 is amended to:
- Add finance income and expenses to the list of components of other comprehensive income;
- Require line items to be presented in the statement of financial position in respect of contracts that are within the scope of IFRS 17;
- Require line items to be presented in the statement of profit or loss in respect of amounts related to contracts within the scope of IFRS 17.
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Amendments to IFRS 17 amendment to IAS 1
Mandatory date: Annual periods beginning on or after 1 January 2023. Earlier application is permitted.
IAS 1 is amended to refer to portfolios of contracts rather than groups of contracts within the scope of IFRS 17.
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Definition of Material amendment to IAS 1
Mandatory date: Annual periods beginning on or after 1 January 2020. Earlier application is permitted.
The definition of material is amended to be as follows:
Information is material if omitting, misstating or obscuring it could reasonably be expected to influence decisions that the primary users of general purpose financial statements make on the basis of those financial statements, which provide financial information about a specific reporting entity.
Examples of circumstances that may result in material information being obscured are added to the standard as a result of the amendment, as is guidance on users of financial statements.
For a more detailed discussion of the amendment, read the faculty’s factsheet:
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Amendments to References to the Conceptual Framework in IFRS Standards amendment to IAS 1
Mandatory date: Annual periods beginning on or after 1 January 2020. Earlier application is permitted if an entity also applies the amendments to other IFRS Accounting Standards at the same time.
IAS 1 is updated to refer to the 2018 Conceptual Framework rather than the Framework for the Preparation and Presentation of Financial Statements when referring to materiality, definitions of elements and their recognition criteria and the objective of financial statements.
Related IFRIC interpretations
- IFRIC 1 Existing Decommissioning, Restoration and Similar Liabilities
Addresses accounting for a change in a provision that is included in the carrying amount of an item of PPE. - IFRIC 14 IAS 19 – The Limit on a Defined Benefit Asset, Minimum Funding Requirements and their Interaction
Provides general guidance on how to assess the limit in IAS 19 on the amount of the surplus that can be recognised as an asset. Explains how the pensions asset or liability may be affected when there is a statutory or contractual minimum funding requirement. - IFRIC 17 Distribution of Non-cash Assets to Owners
Addresses the accounting for dividends of non-cash assets, including those where there is a cash alternative. - IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments
Addresses the accounting by an entity which issues equity instruments in order to settle, in full or part, a financial liability. - IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine
Addresses the accounting treatment of mine waste materials, which are the materials removed by mining entities in order to gain access to mineral ore deposits. - IFRIC 21 Levies
Provides guidance on when to recognise liability for a levy imposed by a government. - IFRIC 23 Uncertainty over Income Tax Treatments
Clarifies how to apply the recognition and measurement requirements of IAS 12 when there is uncertainty over income tax treatments. - SIC 7 Introduction of the Euro
The effective start of the EMU after the reporting date does not alter the requirements of IAS 21 at the reporting date. - SIC 25 Income Taxes – Changes in the Tax Status of an Enterprise or its Shareholders
Addresses the deferred tax consequences of changes in tax status of an enterprise or its shareholders. - SIC 29 Disclosure – Service Concession Arrangements
Prescribes disclosures required by a concession operator and concession provider joined by a service concession arrangement. - SIC 32 Intangible Assets – Website Costs
Addresses accounting for costs associated with the development of a website.
UK reduced disclosures – FRS 101
UK qualifying parents and subsidiaries can take advantage of FRS 101 Reduced Disclosure Framework. Our FRS 101 page gives more information on which entities qualify and the criteria to be met.
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Amendments to the standard for FRS 101 preparers
The following amendments must be made to IAS 1 in order to achieve compliance with the Companies Act and related Regulations:
- The statement of financial position must comply with the balance sheet format requirements of the Companies Act.
- The statement of profit or loss and other comprehensive income must comply with the profit and loss account format requirements of the Companies Act.
- Ordinary activities of an entity are defined and extraordinary items are described as highly abnormal material items arising from events falling outside an entity’s ordinary activities.
- It is clarified that items of income or expense are not recognised in profit or loss where such recognition is prohibited by the Companies Act.
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Disclosure exemptions for FRS 101 preparers
FRS 101 paragraph 8(f) states that a qualifying entity is exempt from the IAS 1 requirement to present the following within a set of financial statements:
- A statement of cash flows for the period;
- A third statement of financial position when a retrospective adjustment or reclassification is made;
- A statement of compliance with IFRS;
- A reconciliation of property, plant and equipment, intangible assets, investment properties, biological assets and the number of shares outstanding at the beginning and end of the comparative period;
- Capital management disclosures (this exemption is not available to a financial institution);
- All remaining IAS 1 disclosures must be applied.
IAS 1 paragraphs for which exemption is available: 10(d), 10(f), 16, 38A-D, 40A-D, 111, 134-6.
ICAEW factsheets and guides
The Corporate Reporting Faculty's annual IFRS factsheets provide a more detailed discussion of recent IFRS amendments.
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