Financial Reporting Standard Council  
  Financial Reporting Standards Council



FRSC Issues Invitation to Comment on IASB Proposals to IAS 1 to Improve Presentation of Financial Statements

In line with the continuing convergence of Philippine accounting standards with International Financial Reporting Standards (IFRS) issued by the International Accounting Standards Board (IASB), the Financial Reporting Standards Council (FRSC) (the successor to the Accounting Standards Council) issued an Invitation to Comment on Proposed Amendments to IAS 1, Presentation of Financial Statements – A Revised Presentation.

The Exposure Draft results from the first stage of the IASB’s project on performance reporting and, when finalized, would bring IAS 1 largely into line with the equivalent U.S. standard. The Exposure Draft:
  • specifies that entities should present all income and expenses in one or two statements, separately from changes in equity arising from transactions with owners in their capacity as owners (i.e., owner changes in equity). Consequently, all owner changes in equity are presented separately from nonowner changes in equity. Accordingly, entities are not permitted to present income and expenses (i.e., non-owner changes in equity), as defined in the Framework, in the statement of changes in equity. The purpose of this amendment is to provide better information to users by requiring aggregation of items with shared  characteristics.
  • specifies that a statement of financial position as at the beginning of the period is included in financial statements. Accordingly, in addition to notes, entities presenting comparative information for the previous period are required to include, as a minimum, three statements of financial position and two of each of the other financial statements. IAS 1 requires the presentation of a minimum of two of each financial statement. The extra statement shows the financial position at the beginning of the previous period.
The FRSC invites comments to the IASB Exposure Draft by July 4, 2006.

The FRSC Invitation to Comment may be downloaded form the PICPA website at www.picpa.com.ph and the IASB Exposure Draft, through the PICPA website or from the IASB website at www.iasb.org.