Consistency of presentation and classification

Learning objectives

• Explain the consistency of presentation requirement and its two exceptions.L1
• Determine whether a change in presentation is justified in a given case.L1, L2

Normative references

• IAS 1 §45The presentation and classification of items in the financial statements are retained from one period to the next, unless a Standard requires a change or another presentation would be more appropriate.

Original summaries of the paragraphs (reference register), never a quotation of the standard.

2 questions

• An entity may change the presentation and classification of items in its financial statements every year, according to the preference of its management.L1
• Taurus SA used to classify its transport costs among administrative expenses. After reviewing its financial statements, its management concludes, following a documented analysis, that classification among distribution costs is more appropriate; no standard requires this change (case facts). Is this change of classification possible?L2