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

1

Objective

The objective is to ensure that an entity's first IFRS financial statements, and interim reports for that period, contain high-quality information that is transparent, comparable, provides a suitable starting point, and has benefits exceeding costs.

2

Scope

An entity applies this IFRS in its first IFRS financial statements and each interim financial report presented under IAS 34 for part of the period covered by those statements.

3

First IFRS Statements

First IFRS financial statements are the first annual financial statements in which the entity adopts IFRSs by an explicit and unreserved statement of compliance. This applies if the entity previously used national requirements, compliant statements without an explicit statement, or statements for internal use only.

4

Exclusions

The standard does not apply if an entity stops presenting financial statements, or if its previous statements already contained an explicit and unreserved statement of compliance with IFRSs.

4A

Previous Application

If an entity applied IFRSs in a previous period but its most recent statements did not contain an explicit unreserved statement of compliance, it must either apply IFRS 1 or apply IFRSs retrospectively in accordance with IAS 8 as if it never stopped.

5

Policy Changes

This IFRS does not apply to changes in accounting policies made by an entity that already applies IFRSs. Such changes are subject to IAS 8 and specific transitional requirements in other IFRSs.

6

Opening Statement

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.

7

Accounting Policies

An entity shall use the same accounting policies in its opening IFRS statement of financial position and throughout all periods presented. Those policies must comply with each IFRS effective at the end of the first IFRS reporting period.

8

Versions of IFRSs

An entity shall not apply different versions of IFRSs that were effective at earlier dates. It may apply a new IFRS that is not yet mandatory if that IFRS permits early application.

9

Transitional Provisions

Transitional provisions in other IFRSs apply to entities already using IFRSs; they do not apply to a first-time adopter's transition, except as specified in the Appendices of IFRS 1.

10

Recognition/Measurement

In the opening IFRS statement of financial position, an entity shall: (a) recognise all assets and liabilities required by IFRSs; (b) not recognise items if IFRSs do not permit it; (c) reclassify items previously recognised under previous GAAP if the type of asset/liability/equity differs under IFRSs; and (d) apply IFRSs in measuring all recognised assets and liabilities.

11

Adjustments

Adjustments resulting from differences between accounting policies under previous GAAP and IFRSs at the date of transition are recognised directly in retained earnings (or another category of equity).

12

Exceptions/Exemptions

The standard establishes two categories of exceptions to complying with each IFRS: prohibitions on retrospective application (paragraphs 14-17 and Appendix B) and exemptions (Appendices C-E).

13

Retrospective Prohibition

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

14

Estimates

An entity's estimates in accordance with IFRSs at the date of transition shall be consistent with estimates made for the same date under previous GAAP (adjusted for policy differences), unless there is objective evidence those estimates were in error.

15

New Information

Information received after the date of transition about estimates made under previous GAAP is treated as a non-adjusting event (IAS 10). It is reflected in profit or loss for the current period, not the opening statement of financial position.

16

New Estimates

If IFRSs require estimates at the date of transition that were not required under previous GAAP, those estimates shall reflect conditions that existed at the date of transition.

18

Exemptions

An entity may elect to use one or more of the exemptions contained in Appendices C-E (e.g., regarding business combinations, deemed cost, cumulative translation differences). These exemptions shall not be applied by analogy to other items.

20

Disclosure Requirements

This IFRS does not provide exemptions from the presentation and disclosure requirements in other IFRSs.

21

Comparative Information

First IFRS financial statements must include at least three statements of financial position, two statements of profit or loss and OCI, two separate income statements (if presented), two statements of cash flows, and two statements of changes in equity, along with related notes and comparative information.

22

Historical Summaries

Historical summaries of selected data for periods before the first full comparative period need not comply with IFRSs. However, entities must label previous GAAP information prominently and disclose the nature of main adjustments that would make it comply.

23

Explanation of Transition

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

24

Reconciliations

To explain the transition, the first IFRS financial statements shall include: (a) reconciliations of equity reported under previous GAAP to equity under IFRSs at the transition date and the end of the latest period presented under previous GAAP; and (b) a reconciliation of total comprehensive income under IFRSs for the latest period in the most recent annual statements.

25

Detail in Reconciliations

Reconciliations must give sufficient detail to enable users to understand material adjustments to the statement of financial position and statement of comprehensive income. Material adjustments to the cash flow statement must also be explained.

26

Errors vs Policies

If an entity becomes aware of errors made under previous GAAP, the reconciliations shall distinguish the correction of those errors from changes in accounting policies.

27

IAS 8 Application

IAS 8 requirements regarding changes in accounting policies do not apply to the changes made when an entity adopts IFRSs.

30

Fair Value as Deemed Cost

If an entity uses fair value as deemed cost in its opening IFRS statement of financial position, it shall disclose the aggregate of those fair values and the aggregate adjustment to the carrying amounts reported under previous GAAP.

31

Investments Disclosure

If an entity uses deemed cost for investments in subsidiaries, joint ventures, or associates in its separate opening statement, it shall disclose the aggregate deemed cost (distinguishing between fair value and previous GAAP carrying amount) and the aggregate adjustment.

32

Interim Reports

If an entity presents an interim financial report under IAS 34 for part of the period covered by its first IFRS statements, it must include reconciliations of equity and total comprehensive income for the comparable interim period (current and year-to-date) and explain any changes in accounting policies or exemptions.

34

Effective Date

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

Appendix A

Definitions

• Date of transition to IFRSs: The beginning of the earliest period for which an entity presents full comparative information under IFRSs in its first IFRS financial statements.
• Deemed cost: An amount used as a surrogate for cost or depreciated cost at a given date. Subsequent depreciation or amortisation assumes that the entity had initially recognised the asset or liability at the given date and that its cost was equal to the deemed cost.
• Fair value: The price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
• First IFRS financial statements: The first annual financial statements in which an entity adopts IFRS Accounting Standards, by an explicit and unreserved statement of compliance with IFRS Accounting Standards.
• First IFRS reporting period: The latest reporting period covered by an entity's first IFRS financial statements.
• First-time adopter: An entity that presents its first IFRS financial statements.
• IFRS Accounting Standards: Standards issued by the IASB, comprising IFRSs, IASs, IFRIC Interpretations, and SIC Interpretations.
• Opening IFRS statement of financial position: An entity's statement of financial position at the date of transition to IFRSs.
• Previous GAAP: The basis of accounting that a first-time adopter used immediately before adopting IFRSs.