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ACCA Strategic Professional · Strategic Business Reporting (International)

Presentation and Disclosure in Financial Statements for ACCA SBR

Presentation and disclosure covers how an entity shows its results, position and key judgements to users. In SBR you apply IAS 1, IFRS 18, IAS 8, IAS 10, IFRS 5, IAS 33, IFRS 8 and IAS 24 to a scenario. You identify the correct treatment, calculate any figures, and explain the effect on users.

What this chapter covers

This chapter groups the standards that decide what appears in the financial statements and how it is shown. It covers the structure of the statements, changes in policies and estimates, events after the year end, discontinued operations, earnings per share, segment reporting and related parties. Most of these are not calculation-heavy. They are about judgement and classification.

The chapter links to nearly every other part of the paper. A group question may include an asset held for sale, a post-year-end event or a related party transaction. A reporting and ethics question may ask whether management is presenting results in a misleading way. Earnings per share and segment information also feed into questions on performance and on the needs of investors.

IFRS 18 is effective for annual periods beginning on or after 1 January 2027, so it is not mandatory for earlier periods. It replaces IAS 1, carries forward many of its requirements and moves some to other standards. IAS 8 is retitled (Basis of Preparation of Financial Statements) and IFRS 7 is amended. IFRS 18 introduces defined categories in the statement of profit or loss (operating, investing and financing), new required subtotals, and disclosure of management-defined performance measures. Check the ACCA study guide and the examinable documents list to see which standard is examinable at your sitting. Learn the core IAS 1 ideas first, then see what IFRS 18 changes.

These standards appear in Section A and Section B scenarios, often as a smaller issue inside a larger question. They reward students who spot the issue quickly, state the rule in a sentence and apply it to the facts. Many marks come from classification and explanation, not arithmetic, so a well-organised answer can score well even when a calculation slips. The professional skills marks also reward clear, concise communication of these points to the reader the question names.

Presentation and disclosure in financial statements: topics in the order to study them

  1. 1IAS 1 Presentation of Financial StatementsIt sets the basic framework: components of the statements, going concern, offsetting, current and non-current classification and other comprehensive income.
  2. 2IFRS 18 Presentation and Disclosure in Financial StatementsStudy it straight after IAS 1 so you can see what it changes and what carries over. It applies to annual periods beginning on or after 1 January 2027, so check the examinable list before you rely on it.
  3. 3IAS 8 Accounting Policies, Estimates and ErrorsIt builds on presentation by dealing with consistency, changes and corrections, which are tested often. Note that IFRS 18 retitles IAS 8 and moves some requirements.
  4. 4IAS 10 Events After the Reporting PeriodIt is short and rule-based, and it depends on the year-end cut-off you have just revised.
  5. 5IFRS 5 Discontinued Operations and Held for SaleIt affects classification and measurement of assets and is often tied to group scenarios, so it comes once the basic presentation is clear.
  6. 6IAS 33 Earnings Per ShareIt needs a settled view of profit and equity, and it includes the main calculations in this chapter.
  7. 7IFRS 8 Operating SegmentsIt is a disclosure standard that is easier once you know how the primary statements and earnings are reported.
  8. 8IAS 24 Related Party DisclosuresIt is judgement-led and links to ethics and governance, so it makes a good final topic.

How to prepare Presentation and disclosure in financial statements

Treat this chapter as a set of short rules that you must recognise in a scenario. Aim to state each rule, apply it, and explain the effect on users.

  1. Read each standard once and write a one-line rule and its key conditions in your own words.
  2. Learn the IAS 1 structure, then list exactly what IFRS 18 changes (operating, investing and financing categories, new subtotals, management-defined performance measures) and what it carries over or moves to other standards. IFRS 18 applies to annual periods beginning on or after 1 January 2027. Check the ACCA study guide and the examinable list for which standard is examinable at your sitting, and answer under that version.
  3. Practise IAS 8 and IAS 10 by classifying short facts: change in policy, change in estimate, error, adjusting event or non-adjusting event.
  4. Work through IFRS 5 criteria and the presentation of discontinued operations until you can list the conditions from memory.
  5. Practise IAS 33 calculations: basic EPS, bonus issues, rights issues and diluted EPS. Show the working for each step.
  6. Attempt past scenario questions that mix these topics with groups or ethics, and write full answers under time.
  7. Mark your answers for the issue spotted, the rule applied and the effect explained, not only for the final figure.

Common mistakes in Presentation and disclosure in financial statements

  • Mixing up changes in policy, changes in estimate and errors.

    Fix: Ask first whether the basis of measurement changed, the estimate changed, or earlier information was wrong, then apply the matching treatment.

  • Treating all events after the year end as adjusting.

    Fix: Ask whether the event gives evidence about a condition at the reporting date. If not, it is non-adjusting and may need disclosure only.

  • Classifying an asset as held for sale without checking every IFRS 5 criterion.

    Fix: Check availability, active marketing, a reasonable price and expected timing. Explain which criteria are met or missed.

  • Getting the weighted average number of shares wrong in EPS.

    Fix: Set out a time line, adjust earlier shares by the correct factor, and weight by months for each period.

  • Writing a rule from memory with no link to the scenario.

    Fix: Use the facts, figures and names in the question, and state the consequence for the financial statements or users.

  • Ignoring which version of presentation rules, IAS 1 or IFRS 18, applies at the sitting.

    Fix: Check the current ACCA study guide, the examinable list and examiner updates before you revise, and label your answers accordingly.

Last-day revision: Presentation and disclosure in financial statements

  • IAS 1 requires going concern to be assessed, and accrual accounting to be applied except for cash flow information.
  • Items of income and expense are not offset unless a standard requires or permits it.
  • A change in accounting policy is applied retrospectively unless impracticable; a change in estimate is applied prospectively.
  • Material prior period errors are corrected retrospectively by restating comparatives.
  • Adjusting events give evidence of conditions existing at the reporting date; non-adjusting events arise afterwards.
  • Dividends declared after the reporting date are not recognised as a liability at that date.
  • IFRS 5 held for sale: the asset must be available for immediate sale in its present condition, management must be committed to a plan with an active programme to locate a buyer, the asset must be actively marketed at a reasonable price relative to its fair value, and the sale must be highly probable and expected to complete within one year, with limited exceptions.
  • Held-for-sale assets are measured at the lower of carrying amount and fair value less costs to sell, and are not depreciated.
  • IFRS 5 requires a single amount on the face of the statement of profit or loss for discontinued operations. It comprises the post-tax result of the discontinued operation plus any post-tax gain or loss on remeasurement or disposal.
  • Basic EPS = profit attributable to ordinary equity holders ÷ weighted average number of ordinary shares.
  • A bonus issue is applied to prior periods as if it had always existed; a rights issue includes a bonus element.
  • IFRS 8 segments follow the information the chief operating decision maker reviews.
  • IAS 24 requires disclosure of related party relationships involving control even where there have been no transactions, of transactions and outstanding balances where transactions have occurred, and of key management personnel compensation in total and by category.

Presentation and disclosure in financial statements practice questions

Presentation and disclosure in financial statements in other exams

The same ground in other exams, if you are preparing for more than one or want another angle on it.

Presentation and disclosure in financial statements: frequently asked questions

Which standard should I study first in this chapter?

Start with IAS 1, as it sets out the structure of the financial statements. Then study IFRS 18 to see what changes. The other standards build on this base.

Is IAS 33 mostly calculation?

The calculations are the core of IAS 33, but you should also be able to explain why diluted EPS matters and how bonus or rights issues change comparatives. Show clear workings so you can earn method marks.

How do I decide if an event after the reporting period is adjusting?

Ask whether it provides evidence about a condition that existed at the reporting date. If it does, it is adjusting and the amounts are changed. If it relates to a condition arising afterwards, it is non-adjusting and is disclosed if material.

How is this chapter linked to professional skills marks?

Many questions ask you to advise a named reader, such as a board or an investor. Present your points in a clear, structured way, apply them to the facts, and show commercial awareness and scepticism where management may be flattering results.