The staff presented an analysis of comment letters received on the Exposure Draft of Proposed Amendments to IAS 1 Presentation of Financial Statements (A Revised Presentation) (ED IAS 1). The following decisions were made and the staff was directed to amend ED IAS 1 accordingly.

Titles of a complete set of financial statements

Paragraph 81 of ED IAS 1 states that:

"An entity shall present all components of income and expense recognised in a period: (a) in a single statement of recognised income and expense; or (b) in two statements: a statement displaying components of profit or loss and a second statement beginning with profit or loss and displaying components of other recognised income and expense."

The Board confirmed to maintain the two-statement approach and the single-statement approach as alternatives. After having discussed several alternatives the Board decided that in case of the single statement approach the statement should be titled 'Statement of comprehensive income'.

In case of a two statement approach the statements should be titled 'Income Statement' and 'Statement of recognised income and expenses'. This is the same terminology used in the existing IAS 1. The Board pointed out that it intends to await the outcome of phase B of the project before changing the titles.

The Board decided to keep the names in ED IAS 1 proposed for 'statement of financial position' (previously balance sheet), 'statement of changes in equity' and 'statement of cash flows'. In response to concerns expressed in various comment letters the Board agreed to explicitly define the term 'financial position' in the framework.

Further the Board agreed to the staff recommendation to keep the changes in nomenclature non-mandatory in ED IAS 1.

Statements of financial position at the beginning of the period

ED IAS 1 proposes that a complete set of financial statements should include a statement of financial position as at the beginning of the period. Therefore, an entity presenting comparative information should be required to present three statements of financial position in its financial statements.

The Board decided that the third statement of financial position should only be required when the statement of financial position as at the beginning of the period had been subject to reclassifications and/or restatements. Segregation of owner and non-owner changes in equity

The ED proposes that 'non-owner changes in equity' (components of recognised income and expense) be referred to as 'recognised income and expense' (bearing in mind that an entity is not required to use this term in its financial statements).

Some respondents noted an inconsistent use of the terms 'equity holder' and 'owners' within ED IAS 1. The Board agreed that the definition of these terms is outside the scope of this project but decided to clarify in the introductory paragraphs of ED IAS 1 that the statement of changes in equity should apply to transactions with equity holders acting in their capacity as equity holders and to refer to these equity holders as owners within ED IAS 1.

Other recognised income and expense

Reclassification adjustments

ED IAS 1 requires the disclosure of the reclassification adjustments relating to each component of other recognised income and expense.

The Board confirmed the current guidance in ED IAS 1 on reclassifications. To make it consistent with paragraph 93 and the wording in FAS 130, the Board decided to define reclassifications as follows: 'Reclassification adjustments are amounts reclassified to profit or loss in the current period that were recognised in other recognised income and expense in current or previous periods'.

Related tax effects

The Board confirmed the provisions in paragraphs 90 and 91 of ED IAS 1.

Presentation of per-share measures

Some respondents interpreted the current requirements of paragraph 73 of IAS 33 Earnings per Share to allow presentation of alternative per share measures on the face of the income statement.

The Board confirmed that ED IAS 1 does not propose changes to IAS 33. Therefore, earnings per share will be the only per-share measure presented on the face of the statement of recognised income and expense. If an entity presents any other per share measure, that information is required to be calculated in accordance with IAS 33 and presented in the notes. The Board indicated that an amendment of paragraph 73 of IAS 33 might be necessary to clarify this.

Definition of general purpose financial statements

Paragraph 7 of ED IAS 8 states:

"General purpose financial statements include those that are presented separately or within other public documents such as a regulatory filing or report to shareholders".

A large number of respondents alleged that the reference to 'regulatory filing' could be interpreted as defining all financial statements filed with any regulator to be general purpose financial statements. This may lead to controversy considering that a great number of registrants, public or not, report to various types of regulatory authorities (e.g. in Australia small private companies and subsidiaries of public companies with no external users of financial reports, will be required to prepare general purpose financial reports because they are required to place their financial statements as a public file).

The Board noted that this was not the intention and decided to clarify this by amending paragraph 7 of ED IAS 1.