IFRS 1: First-time Adoption of International Financial Reporting Standards - KLiPs

This KLiP introduces you to IFRS 1. There are three segments in this KLiP:

  1. Scope
  2. Recognition and Measurement, and
  3. Presentation and Disclosure

IFRS 1 aims to ensure that an entity's first financial statements after adopting IFRS will:

  • Be transparent and comparable
  • Provide a "suitable starting point" for the entity's accounting under IFRS, and
  • Have benefits that exceed the cost of preparation

 

  1. Scope

IFRS 1 applies to an entity's "first IFRS financial statements" and to interim financial reports for parts of the period covered by the first IFRS financial statements.

 

  1. Recognition and Measurement

In the first financial statement, IFRS 1 requires entities to present an opening IFRS statement of financial position using accounting policies in compliance with each IFRS effective as of the end of the first IFRS reporting period.

Accounting estimates at the date of transition to IFRS are to be consistent with estimates made in accordance with the previously-used standards.

Any adjustments are to be recognized directly in retained earnings or another category of equity if appropriate.

 

  1. Presentation and Disclosure

IFRS 1 requires entities to:

  • Explain the effect of the transition to IFRS on their financial position, financial performance, and cash flows
  • Present certain reconciliations between accounting amounts under previous standards and that of under IFRS
  • This includes interim financial reports covering part of the period of the first IFRS financial statement

 

END

 

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