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Chapter 3

1.2 Statement of financial position

IAS 1 says that an asset should be classed as current on the statement of financial
position if:

 it is realised or consumed during the entity’s normal trading cycle, or

 it is held for trading, or

 it will be realised within 12 months of the reporting date.

A liability should be classed as current on the statement of financial position if

 it is settled during the entity’s normal trading cycle, or

 it is held for trading, or

 it will be settled within 12 months of the reporting date.

A proforma statement of financial position for a single entity is provided on the next
page.

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