IAS 1 prescribes the basis for presentation of general purpose financial statements to ensure comparability both with the entity’s financial statements of previous periods and with the financial statements of other entities.

It sets out overall requirements for the presentation of financial statements, guidelines for their structure and minimum requirements for their content.

IAS 1, or International Accounting Standard 1, plays a crucial role in ensuring the consistency and comparability of financial statements across different entities. By prescribing the basis for presentation of general purpose financial statements, IAS 1 aims to make it easier for stakeholders to assess and compare the financial performance of an entity over time and with other similar entities. For example, when an investor is analyzing the financial statements of two companies in the same industry, adherence to IAS 1 ensures that the financial information is presented in a standardized format, allowing for a more meaningful comparison.

Furthermore, IAS 1 establishes specific guidelines for the structure of financial statements, helping companies present their financial information in a clear and systematic manner. This includes requirements such as the separation of operating and non-operating items, the distinction between current and non-current assets and liabilities, and the presentation of comprehensive income. By providing a framework for the presentation of financial data, IAS 1 enhances transparency and helps users of financial statements make informed decisions based on reliable and consistent information.

In addition to outlining the overall requirements and structure of financial statements, IAS 1 also sets forth minimum content requirements that must be included in the financial statements. These requirements ensure that key financial information, such as the entity's financial position, performance, and cash flows, is clearly presented to users. By establishing a minimum level of disclosure, IAS 1 helps to prevent omission of important details and enhances the relevance and usefulness of financial statements for stakeholders. Overall, adherence to IAS 1 not only promotes comparability and consistency but also enhances the quality and transparency of financial reporting, benefiting both companies and users of financial information.