International Accounting Standard

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IAS 1.1 states that a complete financial statements’ set has to contain a statement of equity changes in a given period, cash flow statement for the period, financial position statement in the period’s balance sheet, comprehensive income statement and the notes which include a summary of explanatory notes and the accounting policies. Any given entity may apply titles for the stated above statements other than those referred to above. A fair presentation, as well as compliance with the International Financial Reporting Standards (IFRSs), is the emphasis of IAS 1.15. The use of the relevant IFRSs which contain additional disclosures as necessity calls for is usually presumed to have an end result of a set of financial statements which reflect a fair presentation as IAS 1.15 states. (, 2010) According to the definition given under IAS 1’s stipulations, fair presentation is the requirement that there is a faithful representation of the transaction effects, other events as well as the conditions with emphasis on the recognition and definitions criteria for income, assets, liabilities and expenses stated in the framework. That entity which ensures that its financial statements are in accordance with the IFRSs shall do an unreserved and explicit statement of its compliance in the notes. Also, any entity that describes its financial statements as complying with IFRSs where the case is contrary, then that entity will be in contravention with the IFRS requirements. (ec.europa.EU, 2010) The reporting is required for general purpose financial statements as IAS 1 says. The main objective of these financial statements is to give information concerning the position of the business financially, cash flows and performance which is useful to various users while making decisions economically. So as to meet the objective, the entity’s financial statements provide such information as. liabilities, assets, equity, expenses and income cash flows and changes in equity.This information combined with notes to financial statements helps the users of such statements to predict on the future of the entity in its cash flows and more so on the certainty and timing of such.