SRI LANKA ACCOUNTING STANDARD- LKAS 1
PRESENTATION OF FINANCIAL STATEMENTS
CONTENTS
1. OBJECTIVE
2. SCOPE
3. DEFINITIONS
3.1. FINANCIAL STATEMENTS
3.1.1 PURPOSE OF FINANCIAL STATEMENTS
3.2. COMPLETE SET OF FININCIAL STATEMENTS
3.3. STATEMENT OF FININCIAL POSITION
3.4. STATEMENT OF COMPREHENSIVE INCOME
3.5. STATEMENT OF CHANGES IN EQUITY
3.6. STATEMENT OF CASH FLOWS
4. NOTES
5. DISCLOSURE OF ACCOUNTING POLICIES
SRI LANKA ACCOUNTING STANDARD- LKAS 1
1. OBJECTIVE
This standard prescribes the basis for presentation of general purpose financial statements to ensure
comparability both with the entity’s financial statements of previous periods and with the financial
statements of other entities. It sets out overall requirements for the presentation of financial
statements, guidelines for their structure and minimum requirements for their content.
2. SCOPE
- An entity shall apply this standard in preparing and presenting general purpose financial statements
in accordance with Sri Lanka Accounting Standards. (SLFRs)
- Other SLFRs set out the recognition, measurement & disclosure requirements for specific
transactions & other events.
- The standard does not apply to the structure & content of condensed interim financial statements
prepared in accordance with LKAS 34.
- This standard uses terminology that is suitable for profit- oriented entities, including public sector
business entities.
- Similarly, entities that do not have equity as defined in LKAS 32
3. DEFINITIONS
The following terms are used in this standard with the meaning specified:
General purpose financial statements are those intended to meet the needs of users who are not in a
position to require an entity to prepare repents tailored to their particular information needs.
Notes provide narrative descriptions of items presented in those statements & information about items
that do not qualify for recognition in those statements.
3.1 Financial Statements
3.1.1 Purpose Of Financial Statements
Financial statements are a structured representation of the financial position and financial performance
of an entity. The objective of financial statements is to provide information about the financial position,
financial performance & cash flows of an entity that is useful to a wide range of users in making
economic decisions.
3.2 Identification Of Financial Statements
An entity shall clearly identify the financial statements and distinguish them from other information in
the same public documents.
3.3 Statement Of Financial Position
Information is to be presented in the statement of financial position. As a minimum, the statement of
financial position shall include line items that present the following amounts:
Property, plant & equipment, investment property, intangible assets, investment accounted for using
the equity method, biological assets, inventories, trade & other receivables, cash& cash equivalents,
trade & payables, etc.
Current/non -current distinction
An entity shall present current and non-current assets and non-current liabilities, as separate
classifications in its statement of financial position in accordance with paragraph 66-76 except when a
presentation based on liquidity provides information that is reliable and more relevant.
Current assets
An entity shall classify an asset as current when,
a) It expects to realize the asset, or intends to sell or consume it, in its normal operating cycle;
b) It holds the asset primarily for the purpose of trading;
c) It expects to realize the asset within twelve months after the reporting period;
Current liabilities
An entity shall classify a liability as current when,
a) It expects to settle the liability in its normal operating cycle;
b) It holds the liability primarily for the purpose of trading;
c) The liability is due to be settled within twelve months after the reporting period; or
d) The entity does not have an unconditional right to defer settlement of the liability for at least
twelve months after reporting period.
3.4 Statement Of Comprehensive Income
An entity shall present all items of income & expenses recognized in a period;
a) In a single statement of comprehensive income
b) In two statements: a statement displaying components of profit/ loss and second statement
beginning with profit/loss and displaying components of other comprehensive income.
3.5 Statement Of Changes In Equity
An entity shall present a statement of changes in equity showing in the statement,
a) A total comprehensive income for the period, showing separately the total amounts
attributable to owners of the parent and non -controlling interest,
b) For each component of equity, the effects of retrospective application/ retrospective
restatement recognized in accordance with LKAS 8, and
c) Deleted
d) For each component of equity, a reconciliation between the carrying amount at the beginning
and the end of the period, separately disclosing changes resulting from,
i. Profit/loss
ii. Each item of other comprehensive income &
iii. Transactions with owners in their capacity as owners,
3.6 Statement Of Cash Flows
Cash flow information provides users of financial statements with a basis to assess the ability of the entity
to generate cash & cash equivalents & the needs of the entity to utilize those cash flows. LKAS 7 sets out
requirements for the presentation & disclosure of cash flow information.
4. NOTES
Structure
The notes shall:
a) Present information about the basis of preparation of the financial statements & the specific
accounting policies used in accordance with paragraphs 117-124,
b) Disclose the information required by SLFRs that is not presented elsewhere in the financial
statements; and
c) Provide information that is not presented elsewhere in the financial statements, but is
relevant to an understanding of any of them.
5. DISCLOSURE OF ACCOUNTING POLICIES
An entity shall disclose in the summary of significant accounting policies;
a) The measurement basis(or bases) used in preparing the financial statements; and
b) The other accounting policies used that are relevant to an understanding of the financial
statements.
Other disclosures
An entity shall disclose in the notes;
a) The amount of dividends proposed before the financial statements were authorized for issue
but not recognized as a distribution to owners during the period, and the related amount per
share; and
b) The amount of any cumulative preference dividends not recognized.
REFERENCE
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