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IFRS1

IFRS 1 provides guidance for an entity's first set of financial statements prepared using International Financial Reporting Standards (IFRSs). The objective is to ensure high quality information that is transparent, comparable, and can be produced at a reasonable cost. An entity must present an opening IFRS statement of financial position that serves as the starting point for accounting under IFRSs. The same accounting policies must be used in the opening statement and throughout all periods presented in the first IFRS financial statements. The standard specifies what must be recognized, not recognized, reclassified, and how measurements must be made in the opening IFRS statement of financial position.

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125 views2 pages

IFRS1

IFRS 1 provides guidance for an entity's first set of financial statements prepared using International Financial Reporting Standards (IFRSs). The objective is to ensure high quality information that is transparent, comparable, and can be produced at a reasonable cost. An entity must present an opening IFRS statement of financial position that serves as the starting point for accounting under IFRSs. The same accounting policies must be used in the opening statement and throughout all periods presented in the first IFRS financial statements. The standard specifies what must be recognized, not recognized, reclassified, and how measurements must be made in the opening IFRS statement of financial position.

Uploaded by

Jkjiwani Acca
Copyright
© Attribution Non-Commercial (BY-NC)
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as PDF, TXT or read online on Scribd
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2011

Technical Summary

IFRS 1 First-time Adoption of International Financial


Reporting Standards

as issued at 1 January 2011. Includes IFRSs with an effective date after 1 January 2011 but not the IFRSs they
will replace.
This extract has been prepared by IFRS Foundation staff and has not been approved by the IASB. For the requirements
reference must be made to International Financial Reporting Standards.

The objective of this IFRS 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:
(a) is transparent for users and comparable over all periods presented;
(b) provides a suitable starting point for accounting in accordance with International Financial Reporting
Standards (IFRSs); and
(c) can be generated at a cost that does not exceed the benefits.

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.

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. Those accounting policies shall comply
with each IFRS effective at the end of its first IFRS reporting period.

In particular, the IFRS requires an entity to do the following in the opening IFRS statement of financial
position that it prepares as a starting point for its accounting under IFRSs:
(a) recognise all assets and liabilities whose recognition is required by IFRSs;
(b) not recognise items as assets or liabilities if IFRSs do not permit such recognition;
(c) reclassify items that it recognised in accordance with previous GAAP as one type of asset, liability or
component of equity, but are a different type of asset, liability or component of equity in accordance with
IFRSs; and
(d) apply IFRSs in measuring all recognised assets and liabilities.
The IFRS grants limited exemptions from these requirements in specified areas where the cost of complying
with them would be likely to exceed the benefits to users of financial statements. The IFRS also prohibits
retrospective application of IFRSs in some areas, particularly where retrospective application would require
judgements by management about past conditions after the outcome of a particular transaction is already
known.

The IFRS requires disclosures that explain how the transition from previous GAAP to IFRSs affected the
entity’s reported financial position, financial performance and cash flows.

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