Note Reference Explanatory note
1. See explanatory note 5 on page 6.
2. See explanatory note 3 on page 6.
3. In our view, derivative assets and liabilities should be presented as separate line items in the
statement of financial position if they are significant. If derivative instruments are not
significant, then they may be included within other financial assets and other financial
liabilities, respectively, with additional details disclosed in the notes. This issue is discussed in
Insights into IFRS (7.8.120.30).
4. FRS 12.74 Deferred tax liabilities and assets are offset if the entity has a legally enforceable right to offset
current tax liabilities and assets (see explanatory note 6 below), and the deferred tax liabilities
and assets relate to income taxes levied by the same tax authority on either:
the same taxable entity; or
different taxable entities, but these entities intend to settle current tax liabilities and assets
on a net basis, or their tax assets and liabilities will be realised simultaneously for each
future period in which these differences reverse.
5. FRS 1.60, 61 In these illustrative financial statements, we have presented current and non-current assets,
and current and non-current liabilities as separate classifications in the statement of financial
position. An entity may present its assets and liabilities broadly in order of liquidity if such
presentation provides reliable and more relevant information. KPMG ISG’s publication Guide to
annual financial statements – Illustrative disclosures for banks provides an example
presentation of assets and liabilities in order of liquidity.
Whichever method of presentation is adopted, for each asset and liability line item that
combines amounts expected to be recovered or settled within (1) no more than 12 months
after the reporting date, and (2) more than 12 months after the reporting date, an entity
discloses in the notes the amount expected to be recovered or settled after more than 12
months.
6. FRS 12.71 An entity offsets current tax assets and current tax liabilities only if it has a legally enforceable
right to set off the recognised amounts, and intends to realise the asset and settle the liability
on a net basis or simultaneously.
7. FRS 105.40
FRS 1.66
Comparatives are not restated to reflect classification as held for sale or distribution at the end of
the reporting date.
In our view, non-current assets, as well as assets and liabilities of disposal groups classified as
held for sale or distribution are classified as current in the statement of financial position.
Consequently, presentation of a three-column statement of financial position with the
headings ‘Assets/Liabilities not for sale’, ‘Assets/Liabilities held for sale’ and ‘Total’, with the
assets and liabilities held for sale or distribution included in non-current line items, would not
generally be appropriate. This issue is discussed in Insights into IFRS (5.4.110.30).