IFRS 1 — First-time Adoption of International Financial Reporting Standards

The ‘OBJECTIVE’ of IFRS 1 is to Ensure that an Entity’s first IFRS financial statements, and its Interim financial reports for part of the period covered by those ‘Financial Statements‘, contain high quality information that:

  • is transparent for users and comparable over all periods presented;
  • provides a suitable starting point for accounting in accordance with International Financial Reporting Standards (IFRSs); AND
  • can be generated at a cost that does not exceed the benefits.

IFRS 1 Effective Date

An entity shall apply this IFRS if its first financial statements are for a period beginning on or after 1 July 2009.

Earlier application is ‘PERMITTED’.

IFRS 1 – Scope

An entity shall apply this IFRS in:

  • its first IFRS financial statements; AND
  • each interim financial report, if any, that it presents in accordance with IAS 34 Interim Financial Reporting for part of the period covered by its first IFRS ‘Financial Statements’.

This IFRS applies when an entity ‘FIRST’ adopts IFRSs.

It does NOT apply when, for example, an entity: 

  • stops presenting ‘Financial Statements’ in accordance with national requirements, having previously presented them as well as another set of financial statements that contained an EXPLICIT and unreserved statement of compliance with IFRSs;
  • presented ‘Financial Statements’ in the PREVIOUS year in accordance with national requirements and those financial statements contained an explicit and unreserved Statement of Compliance with IFRSs; OR
  • presented ‘Financial Statements’ in the previous year that contained an explicit and unreserved statement of compliance with IFRSs, even if the auditors QUALIFIED their audit report on those financial statements.

IFRS 1 – Recognition and Measurement

1. Opening IFRS Statement of Financial Position

An entity shall PREPARE and PRESENT an opening IFRS Statement of Financial Position at the date of transition to IFRSs. This is the ‘starting point‘ for its accounting in accordance with IFRSs.

2. Accounting Policies

An entity shall USE the same accounting policies in its opening IFRS Statement of Financial Position and throughout all periods presented in its ‘first IFRS Financial Statements’.

3. Exception to the Retrospective Application of Other IFRSs

This IFRS ‘prohibits retrospective application‘ of some aspects of other IFRSs.

4. Exemptions from Other IFRSs

An entity May ELECT to use One or More of the exemptions. An entity shall NOT apply these exemptions by analogy to other items.

IFRS 1 – Presentation and Disclosure

This IFRS does NOT provide ‘exemptions’ from the presentation and disclosure Requirements in other IFRSs.

1. Comparative Information

An entity’s first IFRS Financial Statements shall INCLUDE at least three Statements of ‘Financial Position‘, two Statements of ‘Profit or Loss and Other Comprehensive Income‘, two separate Statements of ‘Profit or Loss‘ (if presented), two statements of ‘Cash-Flows‘ and two statements of ‘Changes in Equity‘ and Related ‘Notes‘, including comparative information for all statements presented.

2. Explanation of Transition to IFRSs

An entity shall EXPLAIN how the transition from previous GAAP to IFRSs affected its reported financial position, financial performance and cash-flows.

Withdrawal of IFRS 1 (Issued 2003)

This IFRS ‘supersedesIFRS 1 (issued in 2003 and amended at May 2008).

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