Commission Regulation (EC) No 1725/2003 of 29 September 2003 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council (Text with EEA relevance) (repealed) (c. 1725)

ANNEX

INTERNATIONAL ACCOUNTING STANDARD IAS 1 (REVISED 1997)

Presentation of financial statements

ACCOUNTING POLICIES

20. Management should select and apply an enterprise's accounting policies so that the financial statements comply with all the requirements of each applicable International Accounting Standard and interpretation of the Standing Interpretations Committee. Where there is no specific requirement, management should develop policies to ensure that the financial statements provide information that is:

(a)

relevant to the decision-making needs of users; and

(b)

reliable in that they:

(i)

represent faithfully the results and financial position of the enterprise;

(ii)

reflect the economic substance of events and transactions and not merely the legal form(1);

(iii)

are neutral, that is free from bias;

(iv)

are prudent; and

(v)

are complete in all material respects.

21. Accounting policies are the specific principles, bases, conventions, rules and practices adopted by an enterprise in preparing and presenting financial statements.

22. In the absence of a specific International Accounting Standard and an interpretation of the Standing Interpretations Committee, management uses its judgement in developing an accounting policy that provides the most useful information to users of the enterprise's financial statements. In making this judgement, management considers:

(a)

the requirements and guidance in International Accounting Standards dealing with similar and related issues;

(b)

the definitions, recognition and measurement criteria for assets, liabilities, income and expenses set out in the IASC framework; and

(c)

pronouncements of other standard setting bodies and accepted industry practices to the extent, but only to the extent, that these are consistent with (a) and (b) of this paragraph.

(1)

See also SIC-27: evaluating the substance of transactions in the legal form of a lease.