Yakub02
Banned
Financial capital maintenance
With the financial concept of capital maintenance, a profit is not earned during a period unless the financial value of equity at the end of the period exceeds the financial value of equity at the beginning of the period (after adjusting for equity capital raised or distributed).
Physical capital maintenance With a physical concept of capital maintenance, a profit is not earned during a period unless (excluding new equity capital raised during the period and adding back any distribution of dividends to shareholders) the operating capability of the business is greater at the end of the period than at the beginning of the period
Consistency of presentation Consistency of presentation is needed if financial information is to be comparable.
IAS 1 states that there should be consistency in the presentation and classification of items in the financial statements from one year to the next.
Aggregation In addition, items of a dissimilar nature should not be aggregated together in the financial statements (combined as a single item and in a single total),
Fair presentation or a true and fair view? IAS 1 requires financial statements to present fairly the financial position, financial performance and cash flows of the entity.
The application of IFRSs, with additional disclosure when necessary, is presumed to result in financial statements that achieve a fair presentation.’
IAS 1 states that: When the financial statements of an entity comply fully with International Financial Reporting Standards, this fact should be disclosed; and An entity should not claim to comply with IFRSs unless it complies with all
With the financial concept of capital maintenance, a profit is not earned during a period unless the financial value of equity at the end of the period exceeds the financial value of equity at the beginning of the period (after adjusting for equity capital raised or distributed).
Physical capital maintenance With a physical concept of capital maintenance, a profit is not earned during a period unless (excluding new equity capital raised during the period and adding back any distribution of dividends to shareholders) the operating capability of the business is greater at the end of the period than at the beginning of the period
Consistency of presentation Consistency of presentation is needed if financial information is to be comparable.
IAS 1 states that there should be consistency in the presentation and classification of items in the financial statements from one year to the next.
Aggregation In addition, items of a dissimilar nature should not be aggregated together in the financial statements (combined as a single item and in a single total),
Fair presentation or a true and fair view? IAS 1 requires financial statements to present fairly the financial position, financial performance and cash flows of the entity.
The application of IFRSs, with additional disclosure when necessary, is presumed to result in financial statements that achieve a fair presentation.’
IAS 1 states that: When the financial statements of an entity comply fully with International Financial Reporting Standards, this fact should be disclosed; and An entity should not claim to comply with IFRSs unless it complies with all
