PAGE 1

Presentation of Financial Statements (PAS 1) Objective The objective of PAS 1 is to prescribe the basis for presentation of general purpose financial statements, to ensure comparability both with the entity's financial statements of previous periods and with the financial statements of other entities. PAS 1 sets out the overall framework and responsibilities for the presentation of financial statements, uidelines for their structure and minimum re!uirements for the content of the financial statements. Standards for reco ni"in , measurin , and disclosin specific transactions are addressed in other Standards and #nterpretations. Scope Applies to all eneral purpose financial statements, that are based on Philippine $inancial %eportin Standards. &eneral purpose financial statements are those intended to serve users who do not have the authority to demand financial reports tailored for their own needs. Purpose of Financial Statements The objective of eneral purpose financial statements is to provide information about the financial position, financial performance, and cash flows of an entity that is useful to a wide ran e of users in makin economic decisions. To meet that objective, financial statements provide information about an entity's'

Assets. Liabilities. E uity. !ncome an" e#penses$ inclu"ing gains an" losses. Ot%er c%anges in e uity. &as% flo's.

That information, alon with other information in the notes, assists users of financial statements in predictin the entity's future cash flows and, in particular, their timin and certainty. &omponents of Financial Statements A complete set of financial statements comprises( (a) A statement of financial position as at the end of the period* (b) A statement of comprehensive income for the period* (c) A statement of chan es in e!uity for the period* (d) A statement of cash flows for the period* (e) +otes, comprisin a summary of si nificant accountin policies and other e,planatory information* and (f) A statement of financial position as at the be innin of the earliest comparative period when an entity applies an accountin policy retrospectively or makes a retrospective restatement of items in its financial statements, or when it reclassifies items in its financial statements. Overall &onsi"erations for Statement Presentation Fair Presentation an" &ompliance 'it% PF)Ss The financial statements must -present fairly- the financial position, financial performance and cash flows of an entity. $air presentation re!uires the faithful representation of the effects of transactions, other events, and conditions in accordance with the definitions and reco nition criteria for assets, liabilities, income and e,penses set out in the $ramework. The application of P$%Ss, with additional disclosure when necessary, is presumed to result in financial statements that achieve a fair presentation. PAS 1 re!uires that an entity whose financial statements comply with P$%Ss ma*e an e#plicit an" unreserve" statement of suc% compliance in t%e notes. $inancial statements shall not be described as complyin with P$%Ss unless they comply with all the re!uirements of P$%Ss.

PAGE 2

#nappropriate accountin policies are not rectifie" either by disclosure of the accountin policies used or by notes or e,planatory material. PAS 1 acknowled es that, in e,tremely rare circumstances, mana ement may conclude that compliance with an P$%S re!uirement would be so misleadin that it would conflict with the objective of financial statements set out in the $ramework. #n such a case, the entity is re!uired to depart from the P$%S re!uirement, with detailed disclosure of the nature, reasons, and impact of the departure. +oing &oncern An entity preparin P$%S financial statements is presumed to be a oin concern. #f mana ement has si nificant concerns about the entity's ability to continue as a oin concern, the uncertainties must be disclosed. #f mana ement concludes that the entity is not a oin concern, the financial statements should not be prepared on a oin concern basis, in which case PAS 1 re!uires a series of disclosures. Accrual ,asis of Accounting PAS 1 re!uires that an entity prepare its financial statements, e#cept for cash flow information, usin the accrual basis of accountin . &onsistency of Presentation The presentation and classification of items in the financial statements s%all be retaine" from one period to the ne,t unless a c%ange is justifie" either by a chan e in circumstances or a re!uirement of a new P$%S. -ateriality an" Aggregation .ach material class of similar items must be presented separately in the financial statements. /issimilar items may be a re ated only if the are individually immaterial. Offsetting Assets and liabilities, and income and e,penses, may not be offset unless re!uired or permitted by a Standard or an #nterpretation. &omparative !nformation PAS 1 re!uires that comparative information shall be disclosed in respect of the previous period for all amounts reported in the financial statements, both face of financial statements and notes, unless another Standard re!uires otherwise. #f comparative amounts are chan ed or reclassified, various disclosures are re!uired. Fre uency of )eporting There is a presumption that financial statements will be prepared at least annually. #f the annual reportin period chan es and financial statements are prepared for a different period, the enterprise must disclose the reason for the chan e and a warnin about problems of comparability. ,alance S%eet &urrent./oncurrent 0istinction An entity must normally present a classified balance sheet, separatin current and noncurrent assets and liabilities. 0nly if a presentation based on li!uidity provides information that is reliable and more relevant may the current1noncurrent split be omitted.

PAGE 3
&urrent assets An entity shall classify an asset as current when' (a) #t e,pects to reali"e the asset, or intends to sell or consume it, in its normal operatin cycle* (b) #t holds the asset primarily for the purpose of tradin * (c) #t e,pects to reali"e the asset within twelve months after the reportin period* or (d) The asset is cash or a cash e!uivalent (as defined in #AS 2) unless the asset is restricted from bein e,chan ed or used to settle a liability for at least twelve months after the reportin period. An entity s%all classify all ot%er assets as non1current. /ormal Operating &ycle 3 The time between the ac!uisition of assets for processin and their reali"ation cash or cash e!uivalents. 4hen the entity5s normal operatin cycle is not clearly identifiable, its duration is assumed to be twelve months. &urrent liabilities An entity shall classify a liability as current when' (a) (b) (c) (d) #t e,pects to settle the liability in its normal operatin cycle* #t holds the liability primarily for the purpose of tradin * The liability is due to be settled within twelve months after the reportin period* or The entity does not have an unconditional ri ht to defer settlement of the liability for at least twelve months after the reportin period.

An entity s%all classify all ot%er liabilities as non1current. !ssues on )efinancing An entity classifies its financial liabilities as current when they are due to be settled within twelve months after the balance sheet date, even if' a. The ori inal term was for a period lon er than twelve months* and b. The intention is supported by an a reement to refinance, or reschedule the payments, on a lon 6term basis is complete" after the balance sheet date and completed before the financial statements are authori"ed for issue. #f the entity has the discretion and has the discretion to refinance, or to roll over the obli ation for at least twelve months after the balance sheet date under an e,istin loan facility, it classifies the obli ation as non6current, even if it would be due with in a shorter period.

,reac% of a Loan &ovenant

#f a liability has become payable on demand because an entity has breached an undertakin under a lon 6term loan a reement on or before the balance sheet date, t%e liability is current$ even if t%e len"er %as agree"$ after t%e balance s%eet "ate an" before t%e aut%ori2ation of t%e financial statements for issue$ not to demand payment as a conse!uence of the breach. 7owever, the liability is classifie" as non1current if t%e len"er agree" by t%e balance s%eet "ate to provide a period of race endin at least 18 months after the balance sheet date, within which the entity can rectify the breach and durin which the lender cannot demand immediate repayment.

Statement of compre%ensive income An entity shall present all items of income and e,pense reco ni"ed in aperiod' (a) #n a sin le statement of comprehensive income, or

PAGE 4
(b) #n two statements' a statement displayin components of profit or loss (separate income statement) and a second statement be innin with profit or loss and displayin components of other comprehensive income (statement of comprehensive income). !nformation to be presente" in t%e statement of compre%ensive income As a minimum, the statement of comprehensive income shall include line items that present the followin amounts for the period' (a) %evenue* (b) $inance costs* (c) Share of the profit or loss of associates and joint ventures accounted for usin the e!uity method* (d) Ta, e,pense* (e) A sin le amount comprisin the total of' (i) The post6ta, profit or loss of discontinued operations and (ii) The post6ta, ain or loss reco nised on the measurement to fair value less costs to sell or on the disposal of the assets or disposal roup(s) constitutin the discontinued operation* (f) Profit or loss* ( ) .ach component of other comprehensive income classified by nature (h) Share of the other comprehensive income of associates and joint ventures accounted for usin the e!uity method* and (i) Total comprehensive income. An entity s%all "isclose t%e follo'ing items in t%e statement of compre%ensive income as allocations of profit or loss for t%e perio"( (a) Profit or loss for the period attributable to' (i) 9inority interest, and (ii) 0wners of the parent. (b) Total comprehensive income for the period attributable to' (i) 9inority interest, and (ii) 0wners of the parent. An entity shall present either an analysis of e,penses usin a classification based on either the nature of e#penses of t%eir function with in the entity, whichever provides information that is reliable and more relevant. a. /ature of e#pense met%o" 3 .,penses are a re ated in the income statement accordin to their nature and are not reallocated amon various functions within the entity. %evenue 0ther income ;han es in inventories of finished oods and work in pro ress %aw materials and consumables used .mployee benefit costs /epreciation and amorti"ation 0ther e,pense Total e,pense Profit : : : : : : : (:) :

b. Function of e#pense or cost of sales met%o" 3 ;lassifies e,penses accordin to their function as part of cost of sales or, for e,ample, the cost of distribution or administrative activities. %evenue ;ost of sales &ross profit 0ther income /istribution costs Administrative e,penses 0ther e,penses #ncome before ta, #ncome ta, e,pense +et income : (:) : : (:) (:) (:) : (:) :

PAGE 5
An entity shall not present any items of income an" e#pense as e#traor"inary items, either on the face of the income statement or in the notes Statement of c%anges in e uity An entity s%all present a statement of c%anges in e uity s%o'ing in t%e statement( (a) Total comprehensive income for the period, showin separately the total amounts attributable to owners of the parent and to minority interest* (b) $or each component of e!uity, the effects of retrospective application or retrospective restatement reco ni"ed in accordance with #AS <* (c) The amounts of transactions with owners in their capacity as owners, showin separately contributions by and distributions to owners* and (d) $or each component of e!uity, reconciliation between the carryin amount at the be innin and the end of the period, separately disclosin each chan e. An entity shall present, either in the statement of chan es in e!uity or in the notes, the amount of dividends reco ni"ed as distributions to owners durin the period, and the related amount per share. &as% Flo's Statement ;ash flow information provides users of financial statements with a basis to assess the ability of the entity to enerate cash and cash e!uivalents and the needs of the entity to utili"e those cash flows. /otes to t%e Financial Statements The notes must' a. Present information about the basis of preparation of the financial statements and the specific accountin policies used* b. /isclose any information re!uired by P$%Ss that is not presented on the face of the balance sheet, income statement, statement of chan es in e!uity, or cash flow statement* and c. Provide additional information that is not presented on the face of the balance sheet, income statement, statement of chan es in e!uity, or cash flow statement that is deemed relevant to an understandin of any of them. +otes should be cross6referenced from the face of the financial statements to the relevant note. The notes should normally be presented in the followin order' a. b. A statement of compliance with P$%Ss* A summary of si nificant accountin policies applied, includin ' a. the measurement basis (or bases) used in preparin the financial statements* and b. the other accountin policies used that are relevant to an understandin of the financial statements. c. Supportin information for items presented on the face of the balance sheet, income statement, statement of chan es in e!uity, and cash flow statement, in the order in which each statement and each line item is presented* and d. 0ther disclosures, includin ' a. ;ontin ent liabilities and unreco ni"ed contractual commitments* and b. +on6financial disclosures, such as the entity's financial risk mana ement objectives and policies (see PAS =8).

0isclosure of ju"gments 1 an entity must disclose, in the summary of si nificant accountin policies or other notes, the jud ments, apart from those involvin estimations, that mana ement has made in the process of applyin the entity's accountin policies that have the most si nificant effect on the amounts reco ni"ed in the financial statements.

1 1 E/0 1 1