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| International Accounting standard(IAS) |
What is the International Accounting Standards (IAS-1)? Describes in details:
IAS -1 (International Accounting Standard 1) is a standard issued by the International Accounting Standards Board (IASB) that provides guidelines for the presentation of financial statements. It aims to ensure that financial statements are presented in a clear, consistent, and comparable manner across different companies and industries.
Key aspects of IAS 1 include:
1.General Requirements:
It outlines the general principles for preparing and presenting financial statements, including the need for transparency, comparability, and consistency in the financial information presented.
2.Components of Financial Statements:
IAS 1 specifies the components of financial statements, which include the balance sheet (statement of financial position), income statement (statement of profit or loss), statement of changes in equity, statement of cash flows, and notes to the financial statements.
3.Going Concern:
The standard requires financial statements to be prepared on a going concern basis, meaning the company is assumed to continue its operations for the foreseeable future unless there is evidence to the contrary.
4.Accrual Basis of Accounting:
Financial statements should be prepared using the accrual basis of accounting, where transactions are recorded when they occur, not when cash is received or paid.
5.Consistency:
IAS-1emphasizes the need for consistent accounting policies across periods, and any changes must be disclosed.
6.Fair Presentation and Compliance:
It also stresses that financial statements should provide a true and fair view of the company's financial position, and when complying with IAS, the financial statements are considered to provide such a view.
In short, IAS 1 serves as a framework for the presentation and structure of financial statements to enhance their reliability and comparability across businesses globally.