PAS 1 PRESENTATION OF FINANCIAL STATEMENTS 2.

2. GOING CONCERN - taking into account all available information about the future, which is at least,
SCOPE:
Prescribes the basis for the presentation of general purpose financial statements, the
guidelines for their structure, and the minimum requirements for their content to ENSURE
COMPARABILITY
TYPES OF COMPARABILITY
a. INTRA – COMPARABILITY – refers to the comparability of financial statements of the same entity
but from one period to another.
b. INTER – COMPARABILITY – refers to the comparability of financial statements between
DIFFERENT ENTITIES.
PAS 1 applies to the PREPARATION AND PRESENTATION of general purpose financial
statements.
FINANCIAL STATEMENTS are:
- structured representation of an entity’s financial position and results of its operation.
- are the end product of the financial reporting process and the means by which the information gathered
and processed is periodicall communicated to users.
- it pertains only to the entity and not to the industry where the entity belongs or the economy as a whole
GENERAL PURPOSE FINANCIAL STATEMENTS – those intended to meet the needs of users who
are not in a position to require an entity to prepare reports tailored to their particular information needs.
- cater to most of the common needs of a wide range of external users.
but not limited to 12 months from the reporting date
- if the entity has a history of profitabe operations and ready access to financial resources, management
may conclude that the entity is going concern without detailed analysis.
3. ACCRUAL BASIS OF ACCOUNTING – all FS shall be prepared using the accrual basis of
accounting except for statement of cash flows w/c is prepared using cash basis
4. MATERIALITY AND AGGREGATION - each material class o similar items is presented separately
- SIMILAR ITEMS “LINE ITEM” – DISSIMILAR ITEMS are presented separately unless they are
immaterial.
5. OFFSETTING – asset and liabilities or income and expenses are presented separately and are not
offset, unless offsetting is required or permitted
6. FREQUENCY OF REPORTING – FS are prepared at least annually. If the entity changes its reporting
period to a period longer or shorter than one year, it shall disclose the ff:
a. the PERIOD COVERED by the financial statements
b. the REASON for using a longer or shorter period
c. the FACT that amounts presented in the financial statements are not entirely comparable.
7. COMPARATIVE INFORMATION – PAS 1 requires an entity to present comparative information in
respect to the preceding period for all amounts reported in the current period’s financial statements.
ADDITIONAL STATEMENTS OF FINANCIAL POSITION
1. CURRENT YEAR - As at December 31, 20x2
2. PRECEDING YEAR – As at December 31, 20x1
3. as at the beginning of the preceding period – January 1, 20x1
8. CONSISTENCY OF PRESENTATION –

PURPOSE OF FINANCIAL STATEMENTS STRUCTURE AND CONTENT OF FINANCIAL STATEMENTS

1. PRIMARY OBJECTIVE: provide information about the FINANCIAL POSITION, FINANCIAL 1. the name of the reporting entity
PERFORMACE AND CASH FLOWS of an entity that is useful to a wide range of users in making 2. Whether the statements are for the individual entity or for a group of entities
economic decisions. 3. The date of the end of the reporting period or the period covered by the financial statements.
2. SECONDARY OBJECTIVE: to show the results of managements stewardship over the entity’s 4. The presentation currency
resources. 5. The level of rounding used.

FINANCIAL STATEMENTS provide information about an entity’s PAS 1 does not prescribe the order or format of presenting items in the statement of financial
a. ASSET (ECONOMIC RESOURCES) position.
b. LIABILITIES (ECONOMIC OBLIGATIONS)
c. EQUITY Classified – shows distinctions between current and non current assets and current and non current
d. INCOME liabilities.
e.EXPENSES - highlights an entity’s working capital and facilitates the computation of liquidity and solvency ratios
f. CONTRIBUTIONS BY AND DISTRIBUTIONS TO , OWNERS Unclassified – shows no distinction between current and non current items.
g. CASH FLOWS

COMPLETE SET OF FINANCIAL STATEMENTS

1. STATEMENT OF FINANCIAL POSITION
2. STATEMENT OF PROFIT OR LOSS AND OTHER COMPREHENSIVE INCOME
3. STATEMENT OF CHANGES IN EQUITY
4. STATEMENT OF CASH FLOW
5. NOTES
6. ADDITIONAL STATEMENT OF FINANCIAL POSITION

GENERAL FEATURES OF FINANCIAL STATEMENTS

1. FAIR PRESENTATION AND COMPLIANCE WITH PFRSs
- faithfully representing / also requires the proper selection and application of accounting policies, proper
presentation of information, and provision of additional disclosures whenever relevant to the understanding
of the financial statements,.
PAS 2 INVENTORIES
SCOPE
Prescribes the accounting treatment for inventories

PAS 2 applies to all inventories except

a. Financial instruments (PAS 32 and PFRS 9)
b. Biological assets and agricultural produce at the point of harvest (PAS 41)

MEASUREMENT
Inventories are measured at the LOWER OF COST AND NET REALIZABLE VALUE

INVENTORIES are:
a. held for sale in the ordinary course of business (Finished goods)
b. in the process of production for such sale (work in progress)
c. in the form of materials and supplies to be consumed in the production process or in the rendering of
services (raw materials)

COST
1. Purchase cost – includes the purchase price, import duties, non refundable or non-recoverable purchase
taxes and transport, handling and other costs directly attibutable to the acquisition of the inventory.
2. Conversion cost – costs necessary in converting raw materials into finished goods. It includes the costs
of direct labor and production overhead.
3. Other costs – costs necessary in bringing the inventories to their present location and condition

Excluded:
a. Abnormal amounts of wasted materials, labors or other production costs
b. Storage costs, unless necessary
c. Administrative overheads
d. selling costs