An entity shall present:
The statement of changes in equity following the statement of financial position
The statement of comprehensive income first and the statement of changes in equity last.
. If presented in two-statement format, the Income Statement immediately followed by the statement of comprehensive income
The statement of financial position more prominently than the other statements.
In accordance with IAS 1, which of the following statements is correct?
For the purpose of classifying assets and liabilities into current and non-current components, the entity’s operating cycle can be more than 12 months
. Intangible assets must be presented separately in the statement of financial position.
Assets and liabilities can be offset if they arise from the same transaction or event.
Assets and liabilities must be presented in the order of decreasing liquidity.
Which of the following entities appears not to be a going concern?
Company M’s management is unable to extend its long-term loan, and, given its losses in recent years, it is unlikely that it will be able to raise funds through other means to pay for the loan
Company K’s management intends to liquidate the entity
Company L’s management is being forced to cease the entity’s operations due to a major change in government policies.
. None of the three companies is likely to be a going concern
When the classification of items in its financial statements is changed, the entity:
Must not reclassify the comparative amounts unless absolutely necessary.
Must reclassify comparative amounts, unless it is impractical to do so.
Has an unrestricted choice whether to reclassify the comparative amount or not.
. Must preserve consistency in reporting, and no new reclassification should be allowed.
The information which must be provided so as to properly identify each component of a set of financial statements does not include:
The name of the reporting entity
The presentation currency and level of rounding used.
The country in which the entity operates.
The date of the end of the reporting period or the period covered by the financial statements.
Items of dissimilar nature or function:
. Must be presented separately if they are material.
May be aggregated if accompanied by a note to the account explaining the breakdown
Must always be presented separately in financial statements
Must be aggregated until they are material.
Materiality depends on:
The nature of the omission or misstatement
The size of the omission or misstatement
. Both the nature and size of the omission or misstatement.
The higher of 10% of total assets and 10% of total revenue.
An entity must disclose comparative information for:
Only the immediate past financial period.
Only for material items on the financial statements
The previous comparable period for all amounts reported in the financial statements
The previous comparable period for all amounts reported in the financial statements, as well as any narrative and descriptive information
An entity’s equity may decrease during a financial period because:
Other comprehensive income was lower than net profit.
There was a new share issuance
Total comprehensive income was higher than net profit.
. Prior-period errors resulted from overstatement of the previous year’s profits.
The notes to the accounts can be used for the following, except for:
Explaining why a certain accounting standard was not followed.
Providing disclosures of items not shown on the face of financial statements.
Providing additional breakdown of line items on the face of financial statements.
Explaining the accounting policies used.
