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• The terminology used in the standard is suitable for for-profit entities, including public sector business entities. If not-for-profit entities from the private or public sectors apply this standard, amendments may be needed to the descriptions of certain line items and financial statements.

• A set of financial statements comprises:
• A statement of financial position at the end of the period
 

• A statement of comprehensive income for the period
 

• A statement of changes in equity for the period
 

• A statement of cash flows for the period
 

• Notes, comprising a summary of significant accounting policies and other information
 

• A statement of financial position as at the start of the earliest comparative period when an entity applies an accounting policy retrospectively or makes a retrospective adjustment.
• An entity may use other titles for these statements.
 

• Financial statements must fairly present the financial position, financial performance and cash flows of an entity. The Corporations Act requires an entity’s financial report to comply with Australian Accounting Standards. An entity must disclose in the notes a statement whether the financial statements have been prepared in accordance with Australian Accounting Standards.
 

• An entity must disclose in the notes whether the report is a general purpose or special purpose financial report.
 

• When an entity’s financial statements comply with IFRS, it must make an explicit and unreserved statement of such compliance in the notes.
 

• Financial statements must be prepared on a going concern basis. If management is aware of material uncertainties, it must disclose those uncertainties.
 

• The financial statements, except for the cash flow statement, must be prepared using the accrual basis of accounting.
 

• Each material class of similar items must be presented separately.
 

• Assets and liabilities must not be offset, unless specifically permitted by another Australian Accounting Standard.
 

• A complete set of financial statements, with comparative information, must be presented at least annually.
 

• Comparatives for the prior period must be provided for all amounts and narrative/descriptive information, unless permitted otherwise by another Australian Accounting Standard.
 

• When an entity changes the presentation or classification of items in the financial statements, comparative amounts must also be reclassified unless impracticable. When such reclassifications occur, the entity must disclose the nature, amount and reason for the reclassification. If impracticable, it must disclose the reason and nature.

• Each financial statement and the notes must be clearly identified, with the following information displayed prominently:
• Name of the entity
 

• Whether the report covers the individual entity or a group
 

• The reporting date or reporting period covered by the report
 

• The presentation currency
 

• Level of rounding used in presenting amounts.
 

• Statement of financial position:
• As a minimum, the face of the balance sheet must include:
  1. Property, plant and equipment
   
  
  2. Investment property
   
  
  3. Intangible assets
   
  
  4. Financial assets (excluding e, h and i)
   
  
  5. Investments accounted for using the equity method
   
  
  6. Biological assets
   
  
  7. Inventories
   
  
  8. Trade and other receivables
   
  
  9. Cash and cash equivalents
   
  
  10. Assets classified as held for sale or included in disposal groups (under AASB 5 Non-current Assets Held for Sale and Discontinued Operations)
   
  
  11. Trade and other payables
   
  
  12. Provisions
   
  
  13. Financial liabilities (excluding k and l)
   
  
  14. Current tax liabilities and assets
   
  
  15. Deferred tax liabilities and assets (classified as non-current)
   
  
  16. Liabilities in disposal groups (under AASB 5)
   
  
  17. Minority interest (presented within equity)
   
  
  18. Issued capital and reserves attributable to equity holders of parent
• ­Additional line items, headings and subtotals are also presented if relevant to understanding an entity’s financial position.
 

• Must present current and non-current assets and current and non-current liabilities, except when a presentation based on liquidity provides more relevant and reliable information.
 

• ­An asset is classified as current when any of the following are met:
• It is expected to be realised or consumed in the entity’s normal operating cycle
 

• It is held to be traded
 

• It is expected to be realised within 12 months after the reporting date
 

• It is cash or cash equivalent
• ­A liability is classified as current when any of the following are met:
• It is expected to be settled in the entity’s normal operating cycle
 

• It is held to be traded
 

• It is due to be settled within 12 months after the reporting date
 

• The entity does not have an unconditional right to defer settlement of the liability for at least 12 months after the reporting date. Where a financial liability is due within 12 months after the reporting date and the entity does not have an unconditional right to defer its settlement for at least 12 months after the reporting date, the liability is classified as current, even where there is an agreement to refinance or reschedule payments completed before the financial report is issued. Similarly when a loan covenant has been breached, the liability is reclassified as current, even if the lender has agreed not to demand payment as a result of the breach.
• Other balance sheet related disclosures to be disclosed either in the notes or on the face of the balance sheet include:
• Further subclassifications of line items presented
 

• For each class of share capital, information including number of shares authorised and issued and fully paid
 

• A description of the nature and purpose of each reserve within equity.
 

• Statement of comprehensive income:
• ­All items of income and expense recognised in a period must be presented either in a single statement of comprehensive income or in two statements, one displaying components of profit or loss (separate income statement) and another beginning with profit or loss and displaying components of other comprehensive income (statement of comprehensive income)
 

• As a minimum, the statement of comprehensive income must include:
1. Revenue
 

2. Finance costs
 

3. Share of profit or loss from associates and joint ventures accounted for using the equity method
 

4. Tax expense
 

5. Post-tax profit or loss of discontinued operations
 

6. Profit or loss
 

7. Each component of other comprehensive income classified by nature (excluding h)
 

8. Share of other comprehensive income of associates and joint ventures accounted for using the equity method
 

9. Total comprehensive income
• Allocations of profit or loss and total comprehensive income attributable to minority interests and equity holders of the parent must be disclosed in the statement of comprehensive income.
 

• The items in a-f above may be presented in a separate income statement, along with the allocations of profit or loss referred to in the previous dot point.
 

• Additional line items, headings and subtotals are also presented if relevant to understanding an entity’s financial position.
 

• Extraordinary items are prohibited.
 

• For each component of other comprehensive income, disclose the amount of related income tax, either on the face of the statement or in the notes.
 

• When items of income or expense are material, their nature and amount must be disclosed.
 

• Expenses must be presented classified either by nature or function, whichever is more reliable and relevant.
 

• If expenses are classified by function, additional information is required about depreciation, amortisation and employee benefits expense.
 

• Statement of changes in equity:
• ­Includes:
1. Total comprehensive income for the period, showing separately totals attributable to minority interests and equity holders of the parent
 

2. For each component of equity, the effects of retrospective application or retrospective restatement recognised in accordance with AASB 108 Accounting Policies, Changes in Accounting Estimates and Errors
 

3. The amounts of transactions with owners in their capacity as owners, showing separately contributions by and distributions to owners
 

4. For each component of equity, a reconciliation between the carrying amount at the start and end of the period, separately disclosing each change.
• An entity shall also present, either on the face of the statement of changes in equity or in the notes, the amount of dividends recognised as distributions to owners, and the related amount per share.
 

• Statement of cash flows is disclosed in accordance with AASB 107 Cash Flow Statements.
 
 

• Notes:
• ­Includes information about the basis of preparation of the financial report and the specific accounting policies used (being the measurement bases used and other accounting policies used that are relevant in understanding the financial report).
 

• Includes disclosures required by Australian Accounting Standards that is not presented elsewhere in the financial statements.
 

• Provides information that is not presented elsewhere in the financial statements, but is relevant in understanding them.
 

• Must be presented systematically, and each item on the face of the statements must be cross referenced to any related information in the notes.
 

• Disclosure of judgements made in applying accounting policies and that have a significant effect on amounts recognised must be disclosed.
 

• Disclosure of key assumptions concerning the future and other sources of estimation uncertainty used in determining carrying amounts of assets and liabilities. In respect of those assets and liabilities, their nature and carrying amount at reporting date must also be disclosed.
 

• Capital:
• Disclosure of quantitative and qualitative information that enables financial report users to evaluate an entity’s objectives, policies and processes for managing capital.
 

• Other disclosures include:
• Amount of dividends proposed or declared before the financial report was authorised for issue but not recognised, and the related amount per share
 

• The domicile and legal form of the entity, its country of incorporation and address of registered office
 

• Name of parent and ultimate parent of the group
 

• Various auditor related information
 

• Certain information about franking credits