Statement of financial position
Video: The Statement of Financial Position
Important presentation points
An entity shall present current and non-current assets, and current and non-current liabilities, as separate classifications in its statement of financial position—unless specific exceptions apply, as outlined below
A liquidity-based presentation is permitted if it provides a more useful and structured summary of an entity’s financial position.
Deferred tax rule
liquidity-based presentation
Deferred tax assets and liabilities must always be classified as non-current, regardless of presentation basis.
Thank you very muchfor your attention
Reason for deferred tax being presented as non current
Deferred tax assets and liabilities must always be classified as non-current because they arise from temporary differences that are expected to reverse beyond the short term, and IFRS aims to avoid misleading current/non-current splits for these items.
Liquidity based presentation
Certain industries—such as commercial banks and investment funds—often find that presenting assets and liabilities in order of liquidity offers a more accurate reflection of their financial structure. For example, banks typically focus on short-term deposits and loans, making liquidity-based presentation more relevant than traditional current/non-current classification.
12-Month Disclosure Rule
Meaning of Liquidty basis
If a liquidity-based presentation is chosen, an entity shall disclose the portion of each asset and liability line item that is expected to be recovered or settled after more than 12 months—where those line items combine amounts with differing recovery or settlement timelines.
Liquidity basis means presenting all assets and liabilities in order of liquidity
20-01-09
Billy Litana
Created on May 12, 2026
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Transcript
Statement of financial position
Video: The Statement of Financial Position
Important presentation points
An entity shall present current and non-current assets, and current and non-current liabilities, as separate classifications in its statement of financial position—unless specific exceptions apply, as outlined below
A liquidity-based presentation is permitted if it provides a more useful and structured summary of an entity’s financial position.
Deferred tax rule
liquidity-based presentation
Deferred tax assets and liabilities must always be classified as non-current, regardless of presentation basis.
Thank you very muchfor your attention
Reason for deferred tax being presented as non current
Deferred tax assets and liabilities must always be classified as non-current because they arise from temporary differences that are expected to reverse beyond the short term, and IFRS aims to avoid misleading current/non-current splits for these items.
Liquidity based presentation
Certain industries—such as commercial banks and investment funds—often find that presenting assets and liabilities in order of liquidity offers a more accurate reflection of their financial structure. For example, banks typically focus on short-term deposits and loans, making liquidity-based presentation more relevant than traditional current/non-current classification.
12-Month Disclosure Rule
Meaning of Liquidty basis
If a liquidity-based presentation is chosen, an entity shall disclose the portion of each asset and liability line item that is expected to be recovered or settled after more than 12 months—where those line items combine amounts with differing recovery or settlement timelines.
Liquidity basis means presenting all assets and liabilities in order of liquidity