First Time Adoption of IFRS (IFRS 1)

Applicable Standard

  • IFRS 1: First-Time Adoption of International Financial Reporting Standards


  • Must comply with all IFRS.
  • Partial compliance or a reconciliation from local GAAP to IFRS is not sufficient.
  • Prepared on the basis as though the entity had always applied IFRS.

Key Dates

  • First reporting date
    • Reporting date of the financial statements for the first time IFRS is adopted, e.g. 31 December 20X1.
  • Transition Date
    • Since the previous year’s results must also be shown, effectively the company needs to apply IFRS for the previous period.
    • The transition date is then the beginning date of the previous period, e.g. 1 January 20X0.

Transition Process

  • Identify relevant IFRS standards
  • De-recognise assets and liabilities not allowed under IFRS
  • Recognise new assets and liabilities allowed under IFRS
  • Reclassify assets, liabilities and equity per IFRS rules.
  • Re-measure items based on IFRS rules.

Optional Exemptions

  • Business combinations
    • Accounting for previous business combinations can be retained. Impairment test needs to be done for the goodwill.
  • Non-current assets
    • Fair values under previous GAAP can be used as the “cost” under the IFRS cost model.
  • Foreign currency translation
    • Translation reserve can be transferred into retained earnings.
  • Actuarial gains/losses on employee benefits
    • All actuarial gains/losses can be recognised at the beginning of the current reporting period.


No comments yet.

Leave a Reply

Fill in your details below or click an icon to log in: Logo

You are commenting using your account. Log Out /  Change )

Google+ photo

You are commenting using your Google+ account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )


Connecting to %s

Copyright © 2005 – 2018 All Rights Reserved.

Enter your email address to follow this blog and receive notifications of new posts by email.


Blog Stats

  • 582,525 hits
%d bloggers like this: