CL 04 03-09
Balance Sheet under IFRS - Discussion Points
In IFRS, the Balance Sheet is referred to as the “Statement of Financial Position”. However,
this name does not have to be used in the Statement of Accounts, and CIPFA could use any
name for this statement provided it helped users understand the purpose of the statement.
The Working Group is asked for its views as to whether CIPFA should refer to the
statement as a Balance Sheet, Statement of Financial Position or another title. It
would be helpful if the group could indicate why the preferred title would help users
understand the purpose of the statement.
IAS 1 Presentation of Financial Statements sets out the lines that are required to be included
in the Balance Sheet. These are the minimum requirements, and the lines can be
disaggregated where this will help users to understand the accounts. Sub-totals and headings
can also be added to provide more information that will make the statement more
understandable, and the order of the lines can be amended if this will make the statement
easier to follow. Current and Non-Current items (short term and long term in current
terminology) also have to be shown separately (unless items are shown in order of liquidity,
which would not be relevant to local authorities).
Using just the minimum lines required by IAS 1 would result in a Balance Sheet that included
less detail than the current Balance Sheet format in the SORP. In the sample formats
provided, this minimum level is shown as IFRS Format 1. A consequence of this reduced level
of detail in the Balance Sheet might be that more information would be required in the Notes
to the Accounts.
The Working Group is asked to consider if this minimum level of detail is the
appropriate level of detail for local authority accounts? Will the reduced length
assist users to understand the statement, or will the reduced level of detail make
understanding more difficult?
The examples IFRS Format 2 and IFRS Format 3 show