Chapter 37 - First-time adoption of international financial reporting standards: IFRS 1. The main contents of the chapter consist of mains parts: Related standards, IFRS 1, current GAAP comparisons, looking ahead, end-of-chapter practice. | First-Time Adoption of International Financial Reporting Standards: IFRS 1 Wiecek and Young IFRS Primer Chapter 37 First-Time Adoption of International Financial Reporting Standards Related standards IFRS 1 Current GAAP comparisons Looking ahead End-of-chapter practice IFRS 1 – Overview Objective and scope Recognition and measurement Presentation and disclosure IFRS 1 – Objective and Scope This standard is meant to provide relief from the onerous task of conversion and provides guidance on how to transition over to IFRSs Application An entity would apply this the first time it issues statements with an explicit and unreserved statement that it is in compliance with IFRSs In general, the standard requires retrospective application This will allow users to have greater comparability Two Warnings: 1. Cost benefit -Difficult and time consuming to go back and collect the information needed to apply IFRSs -Information may never have been captured by the entity’s accounting information systems 2. No hindsight -Bias might be introduced when applying the standards retrospectively -Only information that was available at the time may be used for estimates IFRS 1 – Objective and Scope The overall objective of the IFRS: • Transparency • Suitable starting point • Costs do not exceed the benefits First IFRS Statements Two components: 1. Full adoption of IFRS 2. Explicit and unreserved statement of compliance with IFRSs An entity’s financial statements are the first IFRS statements if • Most recent financial statements were presented under national GAAP, in conformity with IFRSs but with no explicit statement to that effect, under national GAAP with partial application of IFRSs, or under national GAAP with a reconciliation of some amounts to IFRSs; • Entity has prepared IFRS statements for internal use only; • Entity has prepared an IFRS reporting package for consolidation purposes only; or • Entity did not prepare financial statement at all previously IFRS 1 – | First-Time Adoption of International Financial Reporting Standards: IFRS 1 Wiecek and Young IFRS Primer Chapter 37 First-Time Adoption of International Financial Reporting Standards Related standards IFRS 1 Current GAAP comparisons Looking ahead End-of-chapter practice IFRS 1 – Overview Objective and scope Recognition and measurement Presentation and disclosure IFRS 1 – Objective and Scope This standard is meant to provide relief from the onerous task of conversion and provides guidance on how to transition over to IFRSs Application An entity would apply this the first time it issues statements with an explicit and unreserved statement that it is in compliance with IFRSs In general, the standard requires retrospective application This will allow users to have greater comparability Two Warnings: 1. Cost benefit -Difficult and time consuming to go back and collect the information needed to apply IFRSs -Information may never have been captured by the entity’s accounting .
