a. The objective of general purpose financial reporting is to provide financial information about the reporting entity that is useful to existing and potential investors, lenders, and other creditors in making decisions about providing resources for the entity.

General purpose financial statements provide information about the financial position of the entity, statement of profit or loss and other comprehensive income, statement of cash flow, and statement of changes in equity, that is, information about the economic resources and the claims against them. Changes in financial position are due to financial performance and other events or transactions.

b. (i) Materiality:
Information is material if its omission from, or misstatement in, the financial statements could influence the economic decisions of users. There is no absolute measure of materiality that can be applied to all businesses. Whether an item is material or not depends on the magnitude or its nature or both in the context of specific circumstances of the business. Items that are being considered as material need to be disclosed in the financial statements. Financial statements could become misleading or confusing if immaterial items are included as line items.

(ii) Consistency:
There is usually more than one way or method by which an item may be treated in the accounts without necessarily violating accounting principles. The concept of consistency holds that when an entity selects a method, it should continue (unless conditions warrant a change) to use that method in subsequent periods so that a comparison of accounting figures over time is meaningful. The concept ensures that the accounting treatment of like items is consistent, taking one accounting period with another.

(iii) Offsetting:
IAS 1 requires that assets and liabilities, and income and expenses should not be offset against each other. Instead, they should be reported separately. Not offsetting would help to compare the amount of assets to liabilities and the income to expenses. Offsetting is only possible when it is permitted by a standard or it reflects the economic substance of the transaction.