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Commission Regulation
(EC) No 1725/2003 of 29. September
2003 amended by Regulation (EC) No 2238/2004
and Regulation (EC) No 1910/2005
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Reporting Period
49. Financial
statements shall be presented at least annually. When an
entity’s balance sheet date changes and the annual
financial statements are presented for a period
longer or shorter than one year, an entity shall
disclose, in addition to the period covered by the financial
statements:
(a) the reason for
using a longer or shorter period; and
(b) the fact that
comparative amounts for the income statement, statement
of changes in equity, cash flow statement and related
notes are not entirely comparable.
50. Normally,
financial statements are consistently prepared covering a
one-year period. However, for practical reasons, some entities
prefer to report, for example, for a 52-week period. This
Standard does not preclude this practice, because the
resulting financial statements are unlikely to be materially
different from those that would be presented for one year.
Balance Sheet
Current/Non-current
Distinction
51. An entity shall
present current and non-current assets, and current and
non-current liabilities, as separate classifications on the
face of its balance sheet in accordance with
paragraphs 57-67 except when a presentation
based on liquidity provides information that is reliable
and is more relevant. When that exception applies, all
assets and liabilities shall be presented broadly in
order of liquidity.
52. Whichever method
of presentation is adopted, for each asset and liability
line item that combines amounts expected to be recovered or
settled within (a) no more than twelve months after the
balance sheet date and (b) more than twelve
months after the balance sheet date, an entity
shall disclose the amount expected to be recovered or settled
after more than twelve months.
53. When an entity
supplies goods or services within a clearly identifiable
operating cycle, separate classification of current and
non-current assets and liabilities on the face of the balance
sheet provides useful information by distinguishing the net
assets that are continuously circulating as working capital
from those used in the entity’s longterm operations. It also
highlights assets that are expected to be realised within the
current operating cycle, and liabilities that are due for
settlement within the same period.
54. For some
entities, such as financial institutions, a presentation of
assets and liabilities in increasing or decreasing order of
liquidity provides information that is reliable and is more
relevant than a current/non-current presentation because the
entity does not supply goods or services within a clearly
identifiable operating cycle.
55. In applying
paragraph 51, an entity is permitted to present some of its
assets and liabilities using a current/non-current
classification and others in order of liquidity when this
provides information that is reliable and is more relevant.
The need for a mixed basis of presentation might arise when an
entity has diverse operations.
56. Information
about expected dates of realisation of assets and liabilities
is useful in assessing the liquidity and solvency of an entity.
IAS 32 requires disclosure of the maturity dates of financial
assets and financial liabilities. Financial assets include
trade and other receivables, and financial liabilities include
trade and other payables. Information on the expected date of
recovery and settlement of nonmonetary assets and liabilities
such as inventories and provisions is also useful, whether or
not assets and liabilities are classified as current or
non-current. For example, an entity discloses the amount of
inventories that are expected to be recovered more than twelve
months after the balance sheet date.
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