What does IAS 1 require regarding the presentation of financial statements?

IAS 1, "Presentation of Financial Statements," requires that general-purpose financial statements present a true and fair view of the company’s financial position and performance while also ensuring compliance with International Financial Reporting Standards (IFRS). This requirement aims to enhance the transparency, comparability, and reliability of financial information, allowing users such as investors, creditors, and other stakeholders to make informed decisions based on the financial data provided.

By stipulating that statements must both reflect a fair presentation and comply with IFRS, IAS 1 sets a high standard for the quality of financial reporting. This includes requiring comprehensive disclosures about the entity's accounting policies, judgments, and estimates that are necessary for a proper understanding of the financial statements. The fair presentation aspect is crucial as it goes beyond mere adherence to accounting standards; it stresses the importance of faithfully representing the underlying economic reality of the entity’s transactions and conditions.

In contrast, compliance with only national laws would not necessarily encompass the rigorous standards of IFRS, potentially leading to less transparency and comparability in financial reporting. Minimal disclosure contradicts the requirements of IAS 1, which emphasizes a need for sufficient information for users to understand the entity's financial position and performance. Finally, preparation based on a cash basis only is not in line