Financial statements tell the story of how the entity has spent the money it earned during the financial year. This story needs to reflect fairly the results of the operations. A fair presentation of expenses is key to forming an understanding of the entity’s operations and their financial effect. GRAP 1 is the Standard that deals with the Presentation of Financial Statements. Financial statements are made up of the elements: assets, liabilities, revenue and expenses. GRAP 1 set out requirements for a consistent presentation and disclosures for expenditure. Which one is better: classification by nature or by function? The linked Ducharme article sets out more information and considerations to the the GRAP 1 classification. Click on link for brochure