Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA AA Exams › What is the difference between classification & presentation?
- This topic has 1 reply, 2 voices, and was last updated 3 years ago by
Kim Smith.
- AuthorPosts
- August 9, 2020 at 10:35 am #579702
I am confused between assertions: classification & presentation; correct me if I am wrong.
Classification asserts that “transactions recorded in proper accounts” such as general ledger, trial balance and Financial Statement.
However, Presentation asserts that “transactions & disclosures that are recorded in accordance with applicable financial reporting framework” meaning that all the transactions & disclosures are in order with legal manner.
August 9, 2020 at 1:09 pm #579727First, transactions/balances have to be properly classified – then they have to be properly presented. Presentation includes related disclosure (i.e. in accordance with applicable financial reporting framework – so that could be IFRS and/or statutory requirements). Presentation would also include, for example, extent of aggregation or disaggregation. Transactions/balances might be appropriately classified but if too MUCH detail is given in SoPL/SoFP over and above the minimum required line items, rather than putting the details in the not disclosures, the financial statements might not “present fairly” because the view is overwhelmed with immaterial detail which effectively conceals what is material.
- AuthorPosts
- You must be logged in to reply to this topic.