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7/22/2019 CPAR-financial-statements.doc

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Presentation of Financial Statements (PAS 1)

Objective

The objective of PAS 1 is to prescribe the basis for presentation of general purpose financialstatements, to ensure comparability both with the entity's financial statements of previous

periods and with the financial statements of other entities. PAS 1 sets out the overall frameworkand responsibilities for the presentation of financial statements, uidelines for their structure andminimum re!uirements for the content of the financial statements. Standards for reconi"in,measurin, and disclosin specific transactions are addressed in other Standards and#nterpretations.

Scope

Applies to all eneral purpose financial statements, that are based on Philippine $inancial%eportin Standards. &eneral purpose financial statements are those intended to serve users whodo not have the authority to demand financial reports tailored for their own needs.

Purpose of Financial Statements

The objective of eneral purpose financial statements is to provide information about the financialposition, financial performance, and cash flows of an entity that is useful to a wide rane of users inmakin economic decisions. To meet that objective, financial statements provide information aboutan entity's

Assets.

Liabilities.

Euity.

!ncome an" e#penses$ inclu"ing gains an" losses.

Ot%er c%anges in euity.

&as% flo's.

That information, alon with other information in the notes, assists users of financial statements inpredictin the entity's future cash flows and, in particular, their timin and certainty.

&omponents of Financial Statements

A complete set of financial statements comprises(a) A statement of financial position as at the end of the period*(b) A statement of comprehensive income for the period*(c) A statement of chanes in e!uity for the period*(d) A statement of cash flows for the period*(e) +otes, comprisin a summary of sinificant accountin policies and other eplanatory

information* and(f) A statement of financial position as at the beinnin of the earliest comparative period when

an entity applies an accountin policy retrospectively or makes a retrospective restatementof items in its financial statements, or when it reclassifies items in its financial statements.

Overall &onsi"erations for Statement Presentation

Fair Presentation an" &ompliance 'it% PFSs

The financial statements must -present fairly- the financial position, financial performance and cashflows of an entity. $air presentation re!uires the faithful representation of the effects oftransactions, other events, and conditions in accordance with the definitions and reconitioncriteria for assets, liabilities, income and epenses set out in the $ramework. The application ofP$%Ss, with additional disclosure when necessary, is presumed to result in financial statementsthat achieve a fair presentation.

PAS 1 re!uires that an entity whose financial statements comply with P$%Ss ma*e an e#plicitan" unreserve" statement of suc% compliance in t%e notes. $inancial statements shall not bedescribed as complyin with P$%Ss unless they comply with all the re!uirements of P$%Ss.


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#nappropriate accountin policies are not rectifie"either by disclosure of the accountin policiesused or by notes or eplanatory material.

PAS 1 acknowledes that, in etremely rare circumstances, manaement may conclude thatcompliance with an P$%S re!uirement would be so misleadin that it would conflict with the

objective of financial statements set out in the $ramework. #n such a case, the entity is re!uired todepart from the P$%S re!uirement, with detailed disclosure of the nature, reasons, and impact ofthe departure.

+oing &oncern

An entity preparin P$%S financial statements is presumed to be a oin concern. #f manaementhas sinificant concerns about the entity's ability to continue as a oin concern, the uncertaintiesmust be disclosed. #f manaement concludes that the entity is not a oin concern, the financialstatements should not be prepared on a oin concern basis, in which case PAS 1 re!uires aseries of disclosures.

Accrual ,asis of Accounting

PAS 1 re!uires that an entity prepare its financial statements, e#cept for cash flow information,usin the accrual basis of accountin.

&onsistency of Presentation

The presentation and classification of items in the financial statements s%all be retaine"from oneperiod to the net unless a c%ange is justifie" either by a chane in circumstances or are!uirement of a new P$%S.

-ateriality an" Aggregation

ach material class of similar items must be presented separately in the financial statements./issimilar items may be areated only if the are individually immaterial.

Offsetting

Assets and liabilities, and income and epenses, may not be offsetunless re!uired or permittedby a Standard or an #nterpretation.

&omparative !nformation

PAS 1 re!uires that comparative information shall be disclosed in respect of the previous period for

all amounts reported in the financial statements, both face of financial statements and notes,unless another Standard re!uires otherwise. #f comparative amounts are chaned or reclassified,various disclosures are re!uired.

Freuency of eporting

There is a presumption that financial statements will be prepared at least annually. #f the annualreportin period chanes and financial statements are prepared for a different period, theenterprise must disclose the reason for the chane and a warnin about problems of comparability.

,alance S%eet

&urrent/oncurrent 0istinction

An entity must normally present a classified balance sheet, separatin current and noncurrentassets and liabilities. 0nly if a presentation based on li!uidity provides information that is reliableand more relevant may the currentnoncurrent split be omitted.


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&urrent assets

An entity shall classify an asset as current when

(a) #t epects to reali"e the asset, or intends to sell or consume it, in its normal operatincycle*

(b) #t holds the asset primarily for the purpose of tradin*

(c) #t epects to reali"e the asset within twelve months after the reportin period* or(d) The asset is cash or a cash e!uivalent (as defined in #AS 2) unless the asset is

restricted from bein echaned or used to settle a liability for at least twelve monthsafter the reportin period.

An entity s%all classify all ot%er assets as noncurrent.

/ormal Operating &ycle3 The time between the ac!uisition of assets for processin and theirreali"ation cash or cash e!uivalents. 4hen the entity5s normal operatin cycle is not clearlyidentifiable, its duration is assumed to be twelve months.

&urrent liabilities

An entity shall classify a liability as current when

(a) #t epects to settle the liability in its normal operatin cycle*(b) #t holds the liability primarily for the purpose of tradin*(c) The liability is due to be settled within twelve months after the reportin period* or(d) The entity does not have an unconditional riht to defer settlement of the liability for at

least twelve months after the reportin period.

An entity s%all classify all ot%er liabilities as noncurrent.

!ssues on efinancing

An entity classifies its financial liabilities as current when they are due to be settled within

twelve months after the balance sheet date, even if

a. The oriinal term was for a period loner than twelve months* and

b. The intention is supported by an areement to refinance, or reschedule the payments, ona lon6term basis is complete" afterthe balance sheet date and completed before thefinancial statements are authori"ed for issue.

#f the entity has the discretion and has the discretion to refinance, or to roll over the

obliation for at least twelve months after the balance sheet date under an eistin loan

facility, it classifies the obliation as non6current, even if it would be due with in a shorterperiod.

,reac% of a Loan &ovenant

#f a liability has become payable on demand because an entity has breached an

undertakin under a lon6term loan areement on or before the balance sheet date, t%eliability is current$ even if t%e len"er %as agree"$ after t%e balance s%eet "ate an"before t%e aut%ori2ation of t%e financial statements for issue$not to demand payment asa conse!uence of the breach. 7owever, the liability is classifie" as noncurrent if t%elen"er agree" by t%e balance s%eet "ate to provide a period of race endin at least 18months after the balance sheet date, within which the entity can rectify the breach and durin

which the lender cannot demand immediate repayment.

Statement of compre%ensive incomeAn entity shall present all items of income and epense reconi"ed in aperiod

(a) #n a sinle statement of comprehensive income, or


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(b) #n two statements a statement displayin components of profit or loss (separate incomestatement) and a second statement beinnin with profit or loss and displayin componentsof other comprehensive income (statement of comprehensive income).

!nformation to be presente" in t%e statement of compre%ensive incomeAs a minimum, the statement of comprehensive income shall include line items that present thefollowin amounts for the period

(a) %evenue*(b) $inance costs*(c) Share of the profit or loss of associates and joint ventures accounted for usin the e!uity

method*(d) Ta epense*(e) A sinle amount comprisin the total of

(i) The post6ta profit or loss of discontinued operations and(ii) The post6ta ain or loss reconised on the measurement to fair value less costs to sell

or on the disposal of the assets or disposal roup(s) constitutin the discontinuedoperation*

(f) Profit or loss*() ach component of other comprehensive income classified by nature(h) Share of the other comprehensive income of associates and joint ventures accounted for

usin the e!uity method* and(i) Total comprehensive income.

An entity s%all "isclose t%e follo'ing items in t%e statement of compre%ensive incomeas allocations of profit or loss for t%e perio"

(a) Profit or loss for the period attributable to(i) 9inority interest, and(ii) 0wners of the parent.

(b) Total comprehensive income for the period attributable to(i) 9inority interest, and(ii) 0wners of the parent.

An entity shall present either an analysis of epenses usin a classification basedon either the nature of e#penses of t%eir functionwith in the entity, whichever providesinformation that is reliable and more relevant.

a. /ature of e#pense met%o" 3 penses are areated in the income statementaccordin to their nature and are not reallocated amon various functions within theentity.

%evenue :0ther income :;hanes in inventories of finished oods and work inproress

:

%aw materials and consumables used :mployee benefit costs :/epreciation and amorti"ation :0ther epense :Total epense (:)Profit :

b. Function of e#pense or cost of sales met%o" 3 ;lassifies epenses accordin to theirfunction as part of cost of sales or, for eample, the cost of distribution or administrativeactivities.

%evenue :

;ost of sales (:)&ross profit :0ther income :/istribution costs (:)

Administrative epenses (:)0ther epenses (:)#ncome before ta :#ncome ta epense (:)+et income :


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An entity shall not presentany items of income an" e#pense as e#traor"inary items,

either on the face of the income statement or in the notesStatement of c%anges in euity

An entity s%all present a statement of c%anges in euity s%o'ing in t%e statement

(a) Total comprehensive income for the period, showin separately the total amountsattributable to owners of the parent and to minority interest*

(b) $or each component of e!uity, the effects of retrospective application or retrospectiverestatement reconi"ed in accordance with #AS

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