Introduction
A revised IAS 1 Presentation of financial statements was issued inSeptember 2007. The main changes to the previous version are as follows:
• Changes in terminology, notably ‘balance sheet’ to statement of financial position.
• Single statement of comprehensive income. This can be split into two (income statement to profit for the year and ‘other comprehensive income’).
• Tax effects of each item of comprehensive income must be shown.
• Dividends cannot be shown in profit or loss (income statement).
• Statement of changes in equity for owner changes in equity. Non-owner changes must be shown in the statement of comprehensive income.
ACCA operates a six month rule in its examinations based on issue date, whereby accounting standards will not be examined until six months have passed from their date of issue. Therefore the revised IAS 1 falls to be examined from the June 2008 examinations.
Most important terminology changes
Old standard / New standard- Balance sheet / Statement of financial position
- Income statement / Statement of comprehensive income (one statement) or Income statement (separate) and Statement of comprehensive income (two statements)
- Statement of recognised income and expense / “Other comprehensive income” section of new comprehensive income statement. “Other comprehensive income” for short.
- Cash flow statement / Statement of cash flows
- Recognised in the income statement / Recognised in profit or loss (Note or not and.)