Fair presentation of financial statements

[Yakub02]

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 the requirements of every applicable Standard.

IAS 1 acknowledges that in extremely rare circumstances, compliance with a standard or an Interpretation may produce financial statements that are so misleading that they do not provide useful information and no longer give a fair presentation. In these cases, an entity may depart from the rules in order that the financial statements are fairly presented

IAS 1:

Presentation of Financial Statements sets out the rules on the form and content of financial statements. A complete set of financial statements consists of: a statement of financial position as at the end of the period;

a statement of comprehensive income for the period (made up of a statement of profit or loss and a statement of other comprehensive income);

a statement of changes in equity for the period;

a statement of cash flows and notes to these statements, consisting of a summary of significant accounting policies used by the entity and other explanatory notes; comparative information in respect of the previous period (as specified); and a statement of financial position as at the beginning of the preceding period when an entity applies an accounting policy retrospectively or retrospectively restates or reclassifies items (as specified).

 

[Ebram kamal]

It is important for entities to comply fully with International Financial Reporting Standards (IFRSs) and to disclose this fact in their financial statements. Compliance with IFRSs ensures that financial statements provide relevant and reliable information to users, which is crucial for making informed decisions.

However, it is important to note that compliance with IFRSs does not necessarily guarantee a fair presentation of the financial statements. Additional disclosures may be necessary to provide a complete and accurate picture of the entity's financial position, financial performance, and cash flows.

Entities should also not claim to comply with IFRSs unless they comply with all the requirements of every applicable Standard. This emphasizes the importance of following all IFRS requirements to ensure that financial statements are presented fairly and accurately.