IFRS 1 – How to Present the financial statement

IFRS 1 is the basic or framework for other standards under IFRS. Accountant must prepare and present the financial report based on this rule.

The first IFRS was released effectively on January 2004. Before that the accountants at UK used IAS 1 as guidance.

In Indonesia, the presentation of financial statement was ruled on PSAK 1 which adopt from IFRS starting from 2012.

Accountant must understand deeply the IFRS 1 in order to stave off the fundamental mistake in their financial report. By understanding the IFRS 1, they will not make a buoyed the financial statement but strictly based on standard.

Hereby the essence of IFRS 1:
– The objective  1). The financial statements is transparent for users and comparable over all periods, 2). Provide a suitable starting point for accounting accordance with IFRS, and 3). Can be generated at cost that does not exceed the benefit.

– General Principle:
a. Recognition and measurement
• Financial statement consist of : 1)financial position ( previous: balance sheet), 2). Statement of profit (loss) and other comprehensive income, 3).Statement of cash flow, 4).Statement of change in equity and 5) related notes, including comprehensive information.
• Financial assets & liabilities  fair value or amortized cost
b. Disclosure
See detail at:
http://www.iasplus.com/en/standards/ifrs/ifrs1

So, if you see a financial statement that have no 5 statements above and not be measured by fair value or amortized cost for its assets, we can conclude the that financial statement is not properly presented according to IFRS. Simple right?

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