IFRS Believe it or not: Restatement of Comparatives
IFRS requires what is commonly referred to as a third balance sheet when a preparer reports an error, a change in accounting policy or a reclassification that affects the Statement of Financial Position.
The third balance sheet is presented as at the beginning of the prior year, i.e., for a 31 December 2022 financial year it would present a third column in the Statement of Financial Position at 1 January 2021, including a note regarding the change with the relevant IAS 8 disclosures explaining the change/error. The January 2021 numbers do not need to be included in any of the other notes.
It is important to note that the December 2021 statements must be presented as ‘restated’ where the numbers are affected, this includes the Statement of Comprehensive Income, Statement of Changes in Equity and possibly the Statement of Cash Flow.
If a third Statement of Comprehensive Income is presented or any other statement that is not required, all the related notes must be presented for that additional year too.
Note that under IFRS for SME’s a third column is not required to be presented.
27 October 2022
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