NZ IAS 1
 Objective – prescribe the basis for presentation
of general purpose financial statements (para 1)
 Scope – applies to all general purpose financial
statements prepared and presented in
accordance with NZ IFRSs (para 2)
 Financial statements are a structured
representation of the financial position and
financial performance of an entity (para 9)
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Financial statements…
 Statement of comprehensive income
 Statement of financial position
 Statement of changes in equity
 Statement of cash flows
 Notes, comprising a summary of significant
accounting policies and other explanatory notes
(para 10(e))
Note that the use of these names is not mandatory
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Overall considerations
 Fair (faithful) presentation (para 15) and compliance
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with NZ IFRS – explicit unreserved statement needs
to be made (para 16)
Going-concern basis (paras 25 & 26)
Accrual basis of accounting (paras 27 & 28)
Materiality & aggregation (paras 7 and 29-31)
Offsetting (paras 32–35)
Frequency of reporting (paras 36–37)
Comparative information (paras 38-44)
Consistency of presentation (paras 45 & 46)
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Statement of Financial Position
 The Statement of financial position is the basis
for evaluating capital structure, liquidity, solvency
and financial flexibility as well as for computing
rates of return
 Has limitations such as the optional
measurement of assets (cost or revaluation
models) and omission of internally generated
intangible assets
 Should always be read in conjunction with the
Notes
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Classification
 Minimum requirements for display on the face of the
Statement of Financial Position (line items) are in para 54
 Further line items can be displayed if relevant to an
understanding of an entity’s financial position (para 55)
 Items are classified on the basis of being current or noncurrent (current implies being sold, consumed or realised
within the normal operating cycle or within 12 months of
balance date)
 Note that items are usually displayed in liquidity order
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Further information
 Paras 77 & 78 note the sub classifications line
items that need to be displayed – this is usually
complied with in the Notes
 Property, plant and equipment (see NZ IAS 16 para 73)
 Receivables
 Inventories (see NZ IAS 2 para 36)
 Provisions
 Contributed equity & reserves
 Note the disclosure for share capital
(para 79)
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Statement of Comprehensive Income
 Total comprehensive income represents the change in equity
resulting from transactions and other events other than changes
resulting from transactions with owners in their capacity as owners
(para 7) such as share issues or dividend payments
 The statement presents the total of income less expense (profit or
loss) followed by other comprehensive income
 Other comprehensive income includes:
 Changes in revaluation surplus (PPE/Intangibles);
 Exchange differences on translating foreign operations;
 Actuarial gains/losses on defined benefit pension plans;
 Gains/losses on remeasuring available for sale financial assets;
 Effective portion of gains/losses on hedging instruments in a cash flow
hedge;
 Share of other comprehensive income (after tax) of associates and equity
accounted joint ventures
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Presentation
 Minimum line items required on face of statement
(para 82) are:
 Revenue
 Finance costs (separate from other expenses)
 Share of profits/(losses) of associates and joint ventures
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accounted for under the equity method
Tax expenses
Profit/(loss) (Non-controlling interest/Owners of parent)
Each component of other comprehensive income
Share of comprehensive income of associates and joint
ventures
Total comprehensive income (NCI/Owners of parent)
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Material items
 When items of income or expense are material,
an entity needs to disclose their nature and
amount separately (para 97).
 These include (para 98):
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Inventory and PPE write-downs/impairment
Cost of restructuring
Disposals of PPE and other investments
Profit/(losses) re discontinuing operations
Litigation settlements
Reversals of provisions
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Additional information
 Expenses are classified either on nature or
function basis (para 99) - See examples in paras 102
& 103
 If classifying by function, must disclose additional
information on the nature of expenses, including
depreciation, amortisation and employee benefits
(para 104)
 Must also disclose:
 Fees to auditors, disclosing separately fees for: audit,
audit-related aspects such as assurance work, tax and
any other services (para NZ105.1)
 Total donations made (para NZ105.2)
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Revenue
 Revenue must be presented separately on the face of the
Statement of Comprehensive Income
 NZ IAS 18 Revenue requires that the amount of each
significant category of revenue is presented separately
and at minimum:
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Revenue from the sale of goods
Revenue from the rendering of services
Interest
Royalties
Dividends
 If any of the above include revenue arising from
exchanges of goods and services, rather than being
settled in cash, those amounts of revenue must be
disclosed separately.
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Statement of Changes in Equity
 This discloses total comprehensive income and
changes in owner related equity
 Specifically, the following is disclosed on the face of
the statement (para 106):
 Total comprehensive income for the period
 For each component of equity, the effects of retrospective
application or restatement as per NZ IAS 8
 For each component of equity a reconciliation between the
opening and closing carrying amount, separately disclosing
changes from profit or loss; each item of other comprehensive
income; and transactions with owners (e.g. contributions and
distributions)
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Notes
 Notes enhance the information in the financial statements
(para 7)
 Each item on the face of the statements is cross-
referenced to any related information in the Notes
 Order of Notes (as per para 114):
 Statement of compliance with IFRSs
 Summary of significant accounting policies
 Supporting information for items on face of statements
 Other disclosures such as contingent liabilities,
unrecognised contractual commitments and nonfinancial disclosures (e.g. entity’s financial risk
management objectives and policies)
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