According to IAS 1, what is included in the financial statements?

The correct answer encompasses the essential components of financial statements as defined by IAS 1 (International Accounting Standard 1). According to IAS 1, a complete set of financial statements typically includes a Statement of Financial Position, which presents the entity's assets, liabilities, and equity at a particular point in time, along with the accompanying notes that provide important context and additional details about the figures presented.

This combination ensures that stakeholders have a comprehensive understanding of the financial position and can make informed decisions. Including the notes is critical because they contain significant accounting policies, breakdowns of account balances, and additional information essential to understanding the financial statements as a whole.

The other options are limited in scope. For instance, focusing solely on the Statement of Profit and Loss or the Statement of Cash Flows does not encompass all the required components of a complete set of financial statements under IAS 1. Management commentary and forecasts, while valuable for providing context and forward-looking insights, are not classified as part of the financial statements required under IAS 1.