International Financial Reporting Standards

IFRS 1

IFRS 2

IFRS 3

IFRS 4

IFRS 5

IFRS 6

IFRS 7

IFRS 8

IFRS 9

IFRS 10

IFRS 11

IFRS 12

IFRS 13

IFRS 14

IFRS 15

IFRS 16

IFRS 1 First-time Adoption of International Financial Reporting Standards

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Overview

IFRS 1 First-time Adoption of International Financial Reporting Standards sets out the pro-ce-dures
that an entity must follow when it adopts IFRSs for the first time as the basis for preparing its
general purpose financial state-ments. The IFRS grants limited ex-emp-tions from the general
re-quire-ment to comply with each IFRS effective at the end of its first IFRS reporting period.

A re-struc-tured version of IFRS 1 was issued in November 2008 and applies if an entity's first IFRS
financial state-ments are for a period beginning on or after 1 July 2009.

History of IFRS 1

Date De-vel-op-ment Comments

September 2001 Project added to IASB agenda History of the project

31 July 2002 Exposure Draft ED 1 First-time Ap-pli-ca-tion of IFRSs published Comment deadline
31 October 2002

June 2003 IFRS 1 First-time Adoption of IFRSs issued Effective for the first IFRS financial
state-ments for a period beginning on or after 1 January 2004

30 June 2005 Amended by Amend-ments to IFRS 1 First-time Adoption of International Financial

Reporting Standards and IFRS 6 Ex-plo-ration for and Eval-u-a-tion of Mineral Resources (more
in-for-ma-tion) A minor amendment to clarify that the exemption in relation to IFRS 6 applies to the
recog-ni-tion and mea-sure-ment re-quire-ments of IFRS 6, as well as the dis-clo-sure
re-quire-ments.

22 May 2008 Amended by Amend-ments to IFRS 1 and IAS 27 Cost of an In-vest-ment in a

Sub-sidiary, Jointly Con-trolled Entity or Associate Effective for annual periods beginning on or
after 1 January 2009

24 November 2008 Re-struc-tured version of IFRS 1 issued Effective if an entity's first IFRS
financial state-ments are for a period beginning on or after 1 July 2009

23 July 2009 Amended by Ad-di-tional Ex-emp-tions for First-time Adopters (Amend-ments to

IFRS 1) (oil and gas assets, leases). Click for more in-for-ma-tion. Effective for annual periods
beginning on or after 1 January 2010

29 January 2010 Amended by Limited Exemption from Com-par-a-tive IFRS 7 Dis-clo-sures for
First-time Adopters (Amendment to IFRS 1). Click for more in-for-ma-tion Effective for or
annual periods beginning on or after 1 July 2010

6 May 2010 Amended by Im-prove-ments to IFRSs (accounting policies changes, reval-u-a-tion

basis as deemed cost, rate reg-u-la-tion)Effective for annual periods beginning on or after 1 July
2011

20 December 2010 Amended by Severe Hy-per-in-fla-tion and Removal of Fixed Dates for First-
time Adopters (Amendment to IFRS 1). Click for more in-for-ma-tion Effective for annual periods
beginning on

or after 1 July 2011

13 March 2012 Amended by Gov-ern-ment Loans (Amend-ments to IFRS 1). Click for more
in-for-ma-tion Effective for annual periods beginning on or after 1 January 2013

17 May 2012 Amended by Annual Im-prove-ments 2009-2011 Cycle (repeat ap-pli-ca-tion,

borrowing costs). Click for more in-for-ma-tion Effective for annual periods beginning on or after 1
January 2013

12 December 2013 Amended by Annual Im-prove-ments to IFRSs 20112013 Cycle (meaning of

effective IFRSs). Click for more in-for-ma-tion Amendment to basis for con-clu-sions only

Note: The above summary does not include details of con-se-quen-tial amend-ments made as the
result of other projects.
Related In-ter-pre-ta-tions

IFRS 1 su-per-sedes SIC-8 First-time Ap-pli-ca-tion of IASs as the Primary Basis of Accounting

Amend-ments under con-sid-er-a-tion

Annual im-prove-ments 2014-2016 cycle

Deloitte Guide to IFRS 1 (November 2009)

In November 2009, Deloitte's IFRS Global Office published a revised Guide to IFRS 1 First-time
Adoption of International Financial Reporting Standards. The guide was first published in 2004 with
the aim of providing first-time adopters with helpful insights for the ap-pli-ca-tion of IFRS 1. This
second edition has the same objective. We have updated the content to reflect the lessons learned
from the first major wave of IFRS adoption in 2005, as well as for the changes to IFRS 1 since 2004.
We have struc-tured the guide to provide users with an ac-ces-si-ble reference manual:

An executive summary explains the most important features of IFRS 1;

Section 2 provides an overview of the re-quire-ments of the Standard;

Sections 3 and 4 cover the specific ex-cep-tions and ex-emp-tions from IFRS 1's general principle of
ret-ro-spec-tive ap-pli-ca-tion of IFRSs, focusing on key im-ple-men-ta-tion issues;

Section 5 addresses other com-po-nents of financial state-ments where im-ple-men-ta-tion issues

fre-quently arise in practice;

Section 6 sets out Q&As dealing with specific fact patterns that users may encounter in practice; and

Section 7 discusses some of the practical im-ple-men-ta-tion decisions faced by first-time adopters.

Click to Download Deloitte's Guide to IFRS 1 (PDF 435k)

Summary of IFRS 1

Objective

IFRS 1 First-time Adoption of International Financial Reporting Standards sets out the pro-ce-dures
that an entity must follow when it adopts IFRSs for the first time as the basis for preparing its
general purpose financial state-ments.

Note: An entity that conducts rate-reg-u-lated ac-tiv-i-ties and has recog-nised amounts in its
previous GAAP financial state-ments that meet the de-f-i-n-i-tion of 'reg-u-la-tory deferral account
balances' (sometimes referred to 'reg-u-la-tory assets' and 'reg-u-la-tory li-a-bil-i-ties') can
op-tion-ally apply IFRS 14 Reg-u-la-tory Deferral Accounts in addition to IFRS 1. An entity that elects
to apply IFRS 14 in its first IFRS financial state-ments must continue to apply it in sub-se-quent
financial state-ments.

De-f-i-n-i-tion of first-time adoption

A first-time adopter is an entity that, for the first time, makes an explicit and un-re-served statement
that its general purpose financial state-ments comply with IFRSs. [IFRS 1.3]

An entity may be a first-time adopter if, in the preceding year, it prepared IFRS financial state-ments
for internal man-age-ment use, as long as those IFRS financial state-ments were not made available
to owners or external parties such as investors or creditors. If a set of IFRS financial state-ments was,
for any reason, made available to owners or external parties in the preceding year, then the entity
will already be con-sid-ered to be on IFRSs, and IFRS 1 does not apply. [IFRS 1.3]

An entity can also be a first-time adopter if, in the preceding year, its financial state-ments: [IFRS 1.3]

asserted com-pli-ance with some but not all IFRSs, or

included only a rec-on-cil-i-a-tion of selected figures from previous GAAP to IFRSs. (Previous GAAP
means the GAAP that an entity followed im-me-di-ately before adopting to IFRSs.)

However, an entity is not a first-time adopter if, in the preceding year, its financial state-ments
asserted:

Com-pli-ance with IFRSs even if the auditor's report contained a qual-i-fi-ca-tion with respect to
con-for-mity with IFRSs.

Com-pli-ance with both previous GAAP and IFRSs.

An entity that applied IFRSs in a previous reporting period, but whose most recent previous annual
financial state-ments did not contain an explicit and un-re-served statement of com-pli-ance with
IFRSs can choose to:

apply the re-quire-ments of IFRS 1 (including the various permitted ex-emp-tions to full
ret-ro-spec-tive ap-pli-ca-tion), or

ret-ro-spec-tively apply IFRSs in ac-cor-dance with IAS 8 Accounting Policies, Changes in Accounting
Estimates and Errors, as if it never stopped applying IFRSs. [IFRS 1.4A]

Overview for an entity that adopts IFRSs for the first time in its annual financial state-ments for the
year ended 31 December 2014

Accounting policies

Select accounting policies based on IFRSs effective at 31 December 2014.

IFRS reporting periods

Prepare at least 2014 and 2013 financial state-ments and the opening balance sheet (as of 1 January
2012 or beginning of the first period for which full com-par-a-tive financial state-ments are
presented, if earlier) by applying the IFRSs effective at 31 December 2014. [IFRS 1.7]

Since IAS 1 requires that at least one year of com-par-a-tive prior period financial in-for-ma-tion be
presented, the opening balance sheet will be 1 January 2012 if not earlier. This would mean that an
entity's first financial state-ments should include at least: [IFRS 1.21]
three state-ments of financial position

two state-ments of profit or loss and other com-pre-hen-sive income

two separate state-ments of profit or loss (if presented)

two state-ments of cash flows

two state-ments of changes in equity, and

related notes, including com-par-a-tive in-for-ma-tion

If a 31 December 2014 adopter reports selected financial data (but not full financial state-ments) on
an IFRS basis for periods prior to 2013, in addition to full financial state-ments for 2014 and 2013,
that does not change the fact that its opening IFRS balance sheet is as of 1 January 2012.

Ad-just-ments required to move from previous GAAP to IFRSs at the time of first-time adoption

Dere-cog-ni-tion of some previous GAAP assets and li-a-bil-i-ties

The entity should eliminate pre-vi-ous-GAAP assets and li-a-bil-i-ties from the opening balance sheet
if they do not qualify for recog-ni-tion under IFRSs. [IFRS 1.10(b)] For example:

IAS 38 does not permit recog-ni-tion of ex-pen-di-ture on any of the following as an in-tan-gi-ble
asset:

research

start-up, pre-op-er-at-ing, and pre-open-ing costs

training

ad-ver-tis-ing and promotion

moving and re-lo-ca-tion

If the entity's previous GAAP had recog-nised these as assets, they are elim-i-nated in the opening
IFRS balance sheet

If the entity's previous GAAP had allowed accrual of li-a-bil-i-ties for "general reserves",
re-struc-tur-ings, future operating losses, or major overhauls that do not meet the con-di-tions for
recog-ni-tion as a provision under IAS 37, these are elim-i-nated in the opening IFRS balance sheet

If the entity's previous GAAP had allowed recog-ni-tion of con-tin-gent assets as defined in IAS 37.10,
these are elim-i-nated in the opening IFRS balance sheet

Recog-ni-tion of some assets and li-a-bil-i-ties not recog-nised under previous GAAP

Con-versely, the entity should recognise all assets and li-a-bil-i-ties that are required to be
recog-nised by IFRS even if they were never recog-nised under previous GAAP. [IFRS 1.10(a)] For
example:
IAS 39 requires recog-ni-tion of all de-riv-a-tive financial assets and li-a-bil-i-ties, including embedded
de-riv-a-tives. These were not recog-nised under many local GAAPs.

IAS 19 requires an employer to recognise a liability when an employee has provided service in
exchange for benefits to be paid in the future. These are not just post-em-ploy-ment benefits (e.g.,
pension plans) but also oblig-a-tions for medical and life insurance, vacations, ter-mi-na-tion
benefits, and deferred com-pen-sa-tion. In the case of 'over-funded' defined benefit plans, this
would be a plan asset.

IAS 37 requires recog-ni-tion of pro-vi-sions as li-a-bil-i-ties. Examples could include an entity's

oblig-a-tions for re-struc-tur-ings, onerous contracts, de-com-mis-sion-ing, re-me-di-a-tion, site
restora-tion, war-ranties, guar-an-tees, and lit-i-ga-tion.

Deferred tax assets and li-a-bil-i-ties would be recog-nised in con-for-mity with IAS 12.

Re-clas-si-fi-ca-tion

The entity should re-clas-sify pre-vi-ous-GAAP opening balance sheet items into the ap-pro-pri-ate
IFRS clas-si-fi-ca-tion. [IFRS 1.10(c)] Examples:

IAS 10 does not permit clas-si-fy-ing dividends declared or proposed after the balance sheet date as
a liability at the balance sheet date. If such liability was recog-nised under previous GAAP it would be
reversed in the opening IFRS balance sheet.

If the entity's previous GAAP had allowed treasury stock (an entity's own shares that it had
purchased) to be reported as an asset, it would be re-clas-si-fied as a component of equity under
IFRS.

Items clas-si-fied as iden-ti-fi-able in-tan-gi-ble assets in a business com-bi-na-tion accounted for

under the previous GAAP may be required to be re-clas-si-fied as goodwill under IFRS 3 because they
do not meet the de-f-i-n-i-tion of an in-tan-gi-ble asset under IAS 38. The converse may also be true
in some cases.

IAS 32 has prin-ci-ples for clas-si-fy-ing items as financial li-a-bil-i-ties or equity. Thus manda-to-rily
re-deemable preferred shares that may have been clas-si-fied as equity under previous GAAP would
be re-clas-si-fied as li-a-bil-i-ties in the opening IFRS balance sheet.

Note that IFRS 1 makes an exception from the "split-accounting" pro-vi-sions of IAS 32. If the liability
component of a compound financial in-stru-ment is no longer out-stand-ing at the date of the
opening IFRS balance sheet, the entity is not required to re-clas-sify out of retained earnings and into
other equity the original equity component of the compound in-stru-ment.

The re-clas-si-fi-ca-tion principle would apply for the purpose of defining re-portable segments
under IFRS 8.

Some off-set-ting (netting) of assets and li-a-bil-i-ties or of income and expense items that had been
ac-cept-able under previous GAAP may no longer be ac-cept-able under IFRS.

Mea-sure-ment
The general mea-sure-ment principle there are several sig-nif-i-cant ex-cep-tions noted below is
to apply effective IFRSs in measuring all recog-nised assets and li-a-bil-i-ties. [IFRS 1.10(d)]

How to recognise ad-just-ments required to move from previous GAAP to IFRSs

Ad-just-ments required to move from previous GAAP to IFRSs at the date of tran-si-tion should be
recog-nised directly in retained earnings or, if ap-pro-pri-ate, another category of equity at the date
of tran-si-tion to IFRSs. [IFRS 1.11]

Estimates

In preparing IFRS estimates at the date of tran-si-tion to IFRSs ret-ro-spec-tively, the entity must use
the inputs and as-sump-tions that had been used to determine previous GAAP estimates as of that
date (after ad-just-ments to reflect any dif-fer-ences in accounting policies). The entity is not
permitted to use in-for-ma-tion that became available only after the previous GAAP estimates were
made except to correct an error. [IFRS 1.14]

Changes to dis-clo-sures

For many entities, new areas of dis-clo-sure will be added that were not re-quire-ments under the
previous GAAP (perhaps segment in-for-ma-tion, earnings per share, dis-con-tin-u-ing op-er-a-tions,
con-tin-gen-cies and fair values of all financial in-stru-ments) and dis-clo-sures that had been
required under previous GAAP will be broadened (perhaps related party dis-clo-sures).

Dis-clo-sure of selected financial data for periods before the first IFRS statement of financial position
(balance sheet)

If a first-time adopter wants to disclose selected financial in-for-ma-tion for periods before the date
of the opening IFRS balance sheet, it is not required to conform that in-for-ma-tion to IFRS.
Con-form-ing that earlier selected financial in-for-ma-tion to IFRSs is optional.[IFRS 1.22]

If the entity elects to present the earlier selected financial in-for-ma-tion based on its previous GAAP
rather than IFRS, it must promi-nently label that earlier in-for-ma-tion as not complying with IFRS
and, further, it must disclose the nature of the main ad-just-ments that would make that
in-for-ma-tion comply with IFRS. This latter dis-clo-sure is narrative and not nec-es-sar-ily
quan-ti-fied.[IFRS 1.22]

Dis-clo-sures in the financial state-ments of a first-time adopter

IFRS 1 requires dis-clo-sures that explain how the tran-si-tion from previous GAAP to IFRS affected
the entity's reported financial position, financial per-for-mance and cash flows. [IFRS 1.23] This
includes:

rec-on-cil-i-a-tions of equity reported under previous GAAP to equity under IFRS both (a) at the date
of tran-si-tion to IFRSs and (b) the end of the last annual period reported under the previous GAAP.
[IFRS 1.24(a)] (For an entity adopting IFRSs for the first time in its 31 December 2014 financial
state-ments, the rec-on-cil-i-a-tions would be as of 1 January 2012 and 31 December 2013.)
rec-on-cil-i-a-tions of total com-pre-hen-sive income for the last annual period reported under the
previous GAAP to total com-pre-hen-sive income under IFRSs for the same period [IFRS 1.24(b)]

ex-pla-na-tion of material ad-just-ments that were made, in adopting IFRSs for the first time, to the
statement of financial position, statement of com-pre-hen-sive income and statement of cash flows
(the latter if presented under previous GAAP) [IFRS 1.25]

if errors in previous GAAP financial state-ments were dis-cov-ered in the course of tran-si-tion to
IFRSs, those must be sep-a-rately disclosed [IFRS 1.26]

if the entity recog-nised or reversed any im-pair-ment losses in preparing its opening IFRS balance
sheet, these must be disclosed [IFRS 1.24(c)]

ap-pro-pri-ate ex-pla-na-tions if the entity has elected to apply any of the specific recog-ni-tion and
mea-sure-ment ex-emp-tions permitted under IFRS 1 for instance, if it used fair values as deemed
cost

Dis-clo-sures in interim financial reports

If an entity is going to adopt IFRSs for the first time in its annual financial state-ments for the year
ended 31 December 2014, certain dis-clo-sure are required in its interim financial state-ments prior
to the 31 December 2014 state-ments, but only if those interim financial state-ments purport to
comply with IAS 34 Interim Financial Reporting. Ex-plana-tory in-for-ma-tion and a rec-on-cil-i-a-tion
are required in the interim report that im-me-di-ately precedes the first set of IFRS annual financial
state-ments. The in-for-ma-tion includes rec-on-cil-i-a-tions between IFRS and previous GAAP. [IFRS
1.32]

Ex-cep-tions to the ret-ro-spec-tive ap-pli-ca-tion of other IFRSs

Prior to 1 January 2010, there were three ex-cep-tions to the general principle of ret-ro-spec-tive
ap-pli-ca-tion. On 23 July 2009, IFRS 1 was amended, effective 1 January 2010, to add two
ad-di-tional ex-cep-tions with the goal of further sim-pli-fy-ing the tran-si-tion to IFRSs for first-time
adopters. The five ex-cep-tions are: [IFRS 1.Appendix B]

IAS 39 Dere-cog-ni-tion of financial in-stru-ments

A first-time adopter shall apply the dere-cog-ni-tion re-quire-ments in IAS 39 prospec-tively for
trans-ac-tions occurring on or after 1 January 2004. However, the entity may apply the
dere-cog-ni-tion re-quire-ments ret-ro-spec-tively provided that the needed in-for-ma-tion was
obtained at the time of initially accounting for those trans-ac-tions. [IFRS 1.B2-3]

IAS 39 Hedge accounting

The general rule is that the entity shall not reflect in its opening IFRS balance sheet (statement of
financial position) a hedging re-la-tion-ship of a type that does not qualify for hedge accounting in
ac-cor-dance with IAS 39. However, if an entity des-ig-nated a net position as a hedged item in
ac-cor-dance with previous GAAP, it may designate an in-di-vid-ual item within that net position as a
hedged item in ac-cor-dance with IFRS, provided that it does so no later than the date of tran-si-tion
to IFRSs. [IFRS 1.B5]
Note: Modified re-quire-ments apply when an entity applies IFRS 9 Financial In-stru-ments (2013).

IAS 27 Non-con-trol-ling interest

IFRS 1.B7 lists specific re-quire-ments of IFRS 10 Con-sol-i-dated Financial State-ments that shall be
applied prospec-tively.

Full-cost oil and gas assets

Entities using the full cost method may elect exemption from ret-ro-spec-tive ap-pli-ca-tion of IFRSs
for oil and gas assets. Entities electing this exemption will use the carrying amount under its old
GAAP as the deemed cost of its oil and gas assets at the date of first-time adoption of IFRSs.

De-ter-min-ing whether an arrange-ment contains a lease

If a first-time adopter with a leasing contract made the same type of de-ter-mi-na-tion of whether an
arrange-ment contained a lease in ac-cor-dance with previous GAAP as that required by IFRIC 4
De-ter-min-ing whether an Arrange-ment Contains a Lease, but at a date other than that required by
IFRIC 4, the amend-ments exempt the entity from having to apply IFRIC 4 when it adopts IFRSs.

Optional ex-emp-tions from the basic mea-sure-ment principle in IFRS 1

There are some further optional ex-emp-tions to the general re-state-ment and mea-sure-ment
prin-ci-ples set out above. The following ex-cep-tions are in-di-vid-u-ally optional. They relate to:

business com-bi-na-tions [IFRS 1.Appendix C]

and a number of others [IFRS 1.Appendix D]:

share-based payment trans-ac-tions

insurance contracts

fair value, previous carrying amount, or reval-u-a-tion as deemed cost

leases

cu-mu-la-tive trans-la-tion dif-fer-ences

in-vest-ments in sub-sidiaries, jointly con-trolled entities, as-so-ci-ates and joint ventures

assets and li-a-bil-i-ties of sub-sidiaries, as-so-ci-ated and joint ventures

compound financial in-stru-ments

des-ig-na-tion of pre-vi-ously recog-nised financial in-stru-ments

fair value mea-sure-ment of financial assets or financial li-a-bil-i-ties at initial recog-ni-tion

de-com-mis-sion-ing li-a-bil-i-ties included in the cost of property, plant and equipment

financial assets or in-tan-gi-ble assets accounted for in ac-cor-dance with IFRIC 12 Service
Con-ces-sion Arrange-ments
borrowing costs

transfers of assets from customers

ex-tin-guish-ing financial li-a-bil-i-ties with equity in-stru-ments

severe hy-per-in-fla-tion

joint arrange-ments

stripping costs in the pro-duc-tion phase of a surface mine

Some, but not all, of them are described below.

Business com-bi-na-tions that occurred before opening balance sheet date

IFRS 1 includes Appendix C ex-plain-ing how a first-time adopter should account for business
com-bi-na-tions that occurred prior to tran-si-tion to IFRS.

An entity may keep the original previous GAAP accounting, that is, not restate:

previous mergers or goodwill writ-ten-off from reserves

the carrying amounts of assets and li-a-bil-i-ties recog-nised at the date of ac-qui-si-tion or merger,
or

how goodwill was initially de-ter-mined (do not adjust the purchase price al-lo-ca-tion on
ac-qui-si-tion)

However, should it wish to do so, an entity can elect to restate all business com-bi-na-tions starting
from a date it selects prior to the opening balance sheet date.

In all cases, the entity must make an initial IAS 36 im-pair-ment test of any remaining goodwill in the
opening IFRS balance sheet, after re-clas-si-fy-ing, as ap-pro-pri-ate, previous GAAP in-tan-gi-bles to
goodwill.

The exemption for business com-bi-na-tions also applies to ac-qui-si-tions of in-vest-ments in

as-so-ci-ates, interests in joint ventures and interests in a joint operation when the operation
con-sti-tutes a business.

Deemed cost

Assets carried at cost (e.g. property, plant and equipment) may be measured at their fair value at
the date of tran-si-tion to IFRSs. Fair value becomes the 'deemed cost' going forward under the IFRS
cost model. Deemed cost is an amount used as a surrogate for cost or de-pre-ci-ated cost at a given
date. [IFRS 1.D6]

If, before the date of its first IFRS balance sheet, the entity had revalued any of these assets under its
previous GAAP either to fair value or to a price-in-dex-ad-justed cost, that previous GAAP revalued
amount at the date of the reval-u-a-tion can become the deemed cost of the asset under IFRS. [IFRS
1.D6]
If, before the date of its first IFRS balance sheet, the entity had made a one-time reval-u-a-tion of
assets or li-a-bil-i-ties to fair value because of a pri-vati-sa-tion or initial public offering, and the
revalued amount became deemed cost under the previous GAAP, that amount would continue to be
deemed cost after the initial adoption of IFRS. [IFRS 1.D8]

This option applies to in-tan-gi-ble assets only if an active market exists. [IFRS 1.D7]

If the carrying amount of property, plant and equipment or in-tan-gi-ble assets that are used in rate-
reg-u-lated ac-tiv-i-ties includes amounts under previous GAAP that do not qualify for
cap-i-tal-i-sa-tion in ac-cor-dance with IFRSs, a first-time adopter may elect to use the previous GAAP
carrying amount of such items as deemed cost on the initial adoption of IFRSs. [IFRS 1.D8B]

Eligible entities subject to rate-reg-u-la-tion may also op-tion-ally apply IFRS 14 Reg-u-la-tory
Deferral Accounts on tran-si-tion to IFRSs, and in sub-se-quent financial state-ments.

IAS 19 Employee benefits: actuarial gains and losses

An entity may elect to recognise all cu-mu-la-tive actuarial gains and losses for all defined benefit
plans at the opening IFRS balance sheet date (that is, reset any corridor recog-nised under previous
GAAP to zero), even if it elects to use the IAS 19 corridor approach for actuarial gains and losses that
arise after first-time adoption of IFRS. If a first-time adopter uses this exemption, it shall apply it to
all plans. [IFRS 1.D10]

Note: This exemption is not available where IAS 19 Employee Benefits (2011) is applied. IAS 19
(2011) is effective for annual reporting periods beginning on or after 1 January 2013.

IAS 21 Ac-cu-mu-lated trans-la-tion reserves

An entity may elect to recognise all trans-la-tion ad-just-ments arising on the trans-la-tion of the
financial state-ments of foreign entities in ac-cu-mu-lated profits or losses at the opening IFRS
balance sheet date (that is, reset the trans-la-tion reserve included in equity under previous GAAP to
zero). If the entity elects this exemption, the gain or loss on sub-se-quent disposal of the foreign
entity will be adjusted only by those ac-cu-mu-lated trans-la-tion ad-just-ments arising after the
opening IFRS balance sheet date. [IFRS 1.D13]

IAS 27 In-vest-ments in separate financial state-ments

In May 2008, the IASB amended the standard to change the way the cost of an in-vest-ment in the
separate financial state-ments is measured on first-time adoption of IFRSs. The amend-ments to IFRS
1:

allow first-time adopters to use a 'deemed cost' of either fair value or the carrying amount under
previous accounting practice to measure the initial cost of in-vest-ments in sub-sidiaries, jointly
con-trolled entities and as-so-ci-ates in the separate financial state-ments

remove the de-f-i-n-i-tion of the cost method from IAS 27 and add a re-quire-ment to present
dividends as income in the separate financial state-ments of the investor
require that, when a new parent is formed in a re-or-gan-i-sa-tion, the new parent must measure the
cost of its in-vest-ment in the previous parent at the carrying amount of its share of the equity items
of the previous parent at the date of the re-or-gan-i-sa-tion

Assets and li-a-bil-i-ties of sub-sidiaries, as-so-ci-ates and joint ventures: different IFRS adoption
dates of investor and investee

If a sub-sidiary becomes a first-time adopter later than its parent, IFRS 1 permits a choice between
two mea-sure-ment bases in the sub-sidiary's separate financial state-ments. In this case, a
sub-sidiary should measure its assets and li-a-bil-i-ties as either: [IFRS 1.D16]

the carrying amount that would be included in the parent's con-sol-i-dated financial state-ments,
based on the parent's date of tran-si-tion to IFRSs, if no ad-just-ments were made for
con-sol-i-da-tion pro-ce-dures and for the effects of the business com-bi-na-tion in which the parent
acquired the sub-sidiary or

the carrying amounts required by IFRS 1 based on the sub-sidiary's date of tran-si-tion to IFRSs

A similar election is available to an associate or joint venture that becomes a first-time adopter later
than an entity that has sig-nif-i-cant influence or joint control over it. [IFRS 1.D16]

If a parent becomes a first-time adopter later than its sub-sidiary, the parent should in its
con-sol-i-dated financial state-ments, measure the assets and li-a-bil-i-ties of the sub-sidiary at the
same carrying amount as in the separate financial state-ments of the sub-sidiary, after adjusting for
con-sol-i-da-tion ad-just-ments and for the effects of the business com-bi-na-tion in which the
parent acquired the sub-sidiary. The same approach applies in the case of as-so-ci-ates and joint
ventures. [IFRS 1.D17]

July 2009: Two Amend-ments to IFRS 1

On 23 July 2009, the IASB amended IFRS 1 to:

exempt entities using the full cost method from ret-ro-spec-tive ap-pli-ca-tion of IFRSs for oil and gas
assets.

exempt entities with existing leasing contracts from re-assess-ing the clas-si-fi-ca-tion of those
contracts in ac-cor-dance with IFRIC 4 De-ter-min-ing whether an Arrange-ment contains a Lease
when the ap-pli-ca-tion of their national accounting re-quire-ments produced the same result.

Click for IASB Press Release (PDF 104k).

November 2009: Proposed Limited Scope Exemption for IFRS 7 Dis-clo-sures

On 26 November 2009, the IASB issued an exposure draft (ED) proposing to amend IFRS 1 to state
that an entity need not provide the com-par-a-tive prior-pe-riod in-for-ma-tion required by the
March 2009 amend-ments to IFRS 7 Improving Dis-clo-sures about Financial In-stru-ments for first-
time adopters adopting before 1 January 2010. As a result, IFRS 1, Appendix E, paragraph E1 will be
amended as follows:
E1 A first-time adopter may apply the tran-si-tional pro-vi-sions in paragraph 44G of IFRS 7 to the
extent that the entity's first IFRS reporting period starts earlier than 1 January 2010.

The proposed limited exemption from com-par-a-tive IFRS 7 dis-clo-sures for first-time adopters is
con-sis-tent with the exemption permitted for early adopters of the March 2009 amend-ments to
IFRS 7. Deadline for comments on the ED is 29 December 2009. Click for IASB Press Release (PDF
101k).

January 2010: IASB amends IFRS 1 to provide IFRS 7 dis-clo-sure exemption

On 28 January 2010, the IASB amended IFRS 1 to exempt first-time adopters of IFRSs from providing
the ad-di-tional dis-clo-sures in-tro-duced in March 2009 by Improving Dis-clo-sures about Financial
In-stru-ments (Amend-ments to IFRS 7). The amendment gives first-time adopters the same
tran-si-tion pro-vi-sions that Amend-ments to IFRS 7 provides to current IFRS preparers. The
amendment is effective on 1 July 2010, with earlier ap-pli-ca-tion permitted. Click for IASB Press
Release (PDF 100k).

December 2010: Two Amend-ments to IFRS 1

On 20 December, the IASB amended IFRS 1 to:

provide relief for first-time adopters of IFRSs from having to re-con-struct trans-ac-tions that
occurred before their date of tran-si-tion to IFRSs.

provide guidance for entities emerging from severe hy-per-in-fla-tion either to resume pre-sent-ing
IFRS financial state-ments or to present IFRS financial state-ments for the first time.

Click for IASB Press Release (PDF 33k).

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