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Chapter 9
Concepts and other considerations
affecting financial statements
2.1 Fair presentation
IAS 1 Presentation of Financial Statements states that
‘Financial statements shall present fairly the financial position, financial
performance and cash flows of an entity’ (IAS 1, para 15).
Entities that comply with all relevant IAS's will virtually always achieve this objective.
A fair presentation requires that entities:
show a faithful representation of the effects of transactions
select definitions and recognition criteria set down in the in accordance with the
conceptual framework and apply accounting policies in accordance with IAS 8
Accounting Policies, Changes in Accounting Estimates and Errors (see later)
present information in a manner which provides relevant, reliable, comparable
and understandable information;
provide additional disclosures if the requirements of an IFRS Standard or IAS
are insufficient to enable users to understand the impact of the transaction on
the financial position and performance
2.2 Going concern
According to IAS 1 Presentation of Financial Statements financial statements should
be prepared on the going concern basis unless management intend to liquidate the
business or to cease trading.
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