IFRS First Time Adoption

From ADempiere
Jump to: navigation, search
This Wiki is read-only for reference purposes to avoid broken links.

IFRS1 sets out the requirements for first time adoption of IFRS.

Most of the standard considers what methods of accounting discussed in other accounting standards are allowed in the presentation of financial reports on first time adoption, including the re-statement of at least one year's comparative numbers.

An entity may elect to use one or more of the following exemptions:

  • business combinations (paragraph 15);
  • fair value or revaluation as deemed cost (paragraphs 16–19);
  • employee benefits (paragraph 20);
  • cumulative translation differences (paragraphs 21 and 22);
  • compound financial instruments (paragraph 23);
  • assets and liabilities of subsidiaries, associates and joint ventures (paragraphs 24 and 25);
  • designation of previously recognised financial instruments (paragraph 25A);
  • share-based payment transactions (paragraphs 25B and 25C);
  • insurance contracts (paragraph 25D);
  • decommissioning liabilities included in the cost of property, plant and equipment (paragraph 25E);
  • leases (paragraph 25F); and
  • fair value measurement of financial assets or financial liabilities at initial recognition (paragraph 25G).

The IFRS prohibits retrospective application of some aspects of other IFRSs relating to:

  • derecognition of financial assets and financial liabilities (paragraph 27);
  • hedge accounting (paragraphs 28–30);
  • estimates (paragraphs 31–34); and
  • assets classified as held for sale and discontinued operations.

In its first IFRS financial statements, an entity that adopts IFRSs before 1 January 2006 shall present at least one year of comparative information, but this comparative information need not comply with IAS 32, IAS 39 or IFRS 4

An entity that adopts IFRSs before 1 January 2006 and chooses to adopt IFRS 6 Exploration for and Evaluation of Mineral Resources or FRS 7 Financial Instruments: Disclosures before 1 January 2006 need not apply the requirements of IFRS 6 or IFRS7 to comparative information presented in its first IFRS financial statements

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

Adempiere users may wish to post GL journals for first time adoption as a special GL journal type in order to be able to distingish these transactions for disclosure and reconciliation between previous GAAP and IFRS

Summary

This standard considers the transitional issues of valuation and disclosure required when first adopting IFRS. These issues are manifested within transactions or as presentation of disclosures and as such Adempiere facilitates compliance with IFRS1.

Michael Judd, 2 July 2008

n.b. If you have any specific requirements in regards to IFRS1 please do not hesitate to get in contact with me for further clarification.