IAS 1 — Presentation of Financial Statements

IAS 1 Presentation of Financial Statements sets out the overall requirements for financial statements,
including how they should be structured, the minimum requirements for their content and overriding
concepts such as going concern, the accrual basis of accounting and the current/non-current distinction.
The standard requires a complete set of financial statements to comprise a statement of financial
position, a statement of profit or loss and other comprehensive income, a statement of changes in
equity and a statement of cash flows

IAS 1 was reissued in September 2007 and applies to annual periods beginning on or after 1 January
2009.

Objective of IAS 1
The objective of IAS 1 (2007) is to prescribe the basis for presentation of general purpose financial
statements, to ensure comparability both with the entity's financial statements of previous periods and
with the financial statements of other entities.

Accrual basis of accounting

IAS 1 requires that an entity prepare its financial statements, except for cash flow information, using the
accrual basis of accounting

Line items
(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) current tax liabilities and current tax assets, 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
(r) issued capital and reserves attributable to owners of the parent.
IAS 7 — Statement of Cash Flows
IAS 7 Statement of Cash Flows requires an entity to present a statement of cash flows as an integral part
of its primary financial statements. Cash flows are classified and presented into operating activities
(either using the 'direct' or 'indirect' method), investing activities or financing activities, with the latter
two categories generally presented on a gross basis.

IAS 7 was reissued in December 1992, retitled in September 2007, and is operative for financial
statements covering periods beginning on or after 1 January 1994.

Fundamental principle in IAS 7

All entities that prepare financial statements in conformity with IFRSs are required to present a
statement of cash flows.

Presentation of the Statement of Cash Flows

Cash flows must be analysed between operating, investing and financing activities. [IAS 7.10]
Key principles specified by IAS 7 for the preparation of a statement of cash flows are as follows:
operating activities are the main revenue-producing activities of the entity that are not investing or
financing activities, so operating cash flows include cash received from customers and cash paid to
suppliers and employees [IAS 7.14] investing activities are the acquisition and disposal of long-term
assets and other investments that are not considered to be cash equivalents [IAS 7.6] financing activities
are activities that alter the equity capital and borrowing structure of the entity [IAS 7.6]

Direct Method Indirect Method