Presentation of Dividends
The IAS 1 requires dividends recognized as distributions to owners and related amounts per share to be presented in the statement of changes in equity or in the notes. Presenting owner dividends in the statement of comprehensive income is strictly prohibited. This is to ensure that owner changes in equity are presented separately from non- owner changes in equity.
IAS 1
An entity shall apply this standard in preparing and presenting general purpose financial statements in accordance with the International Financial Reporting Standards.
International Financial Reporting Standards (IFRS) are standards and interpretations issued by the international Accounting Standards Board. They comprise:
- International Financial Reporting Standards
- International Accounting Standards
- IFRIC Interpretations (International financial reporting interpretations committee)
Notes contain additional information in addition to that presented in the statement of financial position, statement of comprehensive income , separate income statement, statement of changes in equity and statement of cash flows.
Other comprehensive income comprises items of income and expense (including reclassification adjustments ) that are not recognized in profit or loss as required or permitted by other ifrs.
Note: Profit or loss is the total of income less expenses, excluding the components of other comprehensive income.
Reclassification adjustments are amounts reclassified to profit or loss in the current period that were recognized in other comprehensive income in the previous periods. Total comprehensive income is the change in equity during a period resulting from transactions and other events other than those changes resulting from transactions with owners in their capacity as owners.
Complete set of Financial Statements
A complete set of financial statement comprises:
- A statement of financial position as 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
- Notes to the account
Compliance with IFRS
- Financial statements shall present fairly the financial position, financial performance and cash flow of an entity.
- An entity whose financial statement comply with IFRS shall make an explicit and unreserved statement of such compliance in the notes to the account.
- An entity cannot rectify inappropriate accounting policies either by disclosure of the accounting policies used by notes or explanatory materials.
- In extremely rare cases where the management is of the opinion that compliance with a requirement of the IFRS would be so misleading that it would conflict with the objective of financial statements set out in the framework, the entity shall depart from that requirement in the manner set out in paragraph 20 if the relevant regulatory framework requires or otherwise does not prohibit such a departure.
- When an entity departs from a requirement of an ifrs in accordance with paragraph 19, it shall disclose
a) That management has concluded that the financial statements present fairly the entity’s financial position, financial performance and cash flows.
b) That it has complied with applicable IFRSs, except that it has departed from a particular requirement to achieve a fair presentation.
c) The title of the IFRS from which the entity has departed. The nature of the departure, including the treatment that the IFRS would require the reason why that treatment would be so misleading in the circumstances that it would conflict with the objective of financial statements set out in the framework, and also the treatment adopted.
d) For each period presented, the financial effect of the departure on each item in the financial statements that would have been reported in complying with the requirement
e) A department from the requirement of an ifrs in a prior period which would affect the current period must be disclosed.
