IFRS-First Time Adoption

Question 1

When does the guidance for first time adoption of IFRS 1 apply?

Answer 1

When the most recent financial statements were prepared:
In compliance with U.S. GAAP;

In conformity with IFRS in all respects, except that an explicit and unreserved statement of compliance was not presented;

In compliance with U.S. GAAP with reconciliation to IFRS;

In conformity with IFRS but for internal use only;

In conformity with IFRS for consolidation purposes, but without a complete set of financial states or without presenting financial statements of previous periods.

Question 2

What must the first set of IFRS statement must include?

Answer 2

3 statements of financial position,
2 statements of comprehensive income,
2 separate income statements (if presented),
2 statements of cash flows and two statements of changes in equity.

If filing with the SEC, three years of flow statements are required. Interim statements should also be reinstated in IFRS in the first year of adoption.

Question 3

What are mandatory exceptions to the retrospective application of IFRS1?

Answer 3

A. Derecognition of financial assets and liabilities;
B. Hedge accounting;
C. Assets held for sale and discontinued operations;
D. Certain aspects of accounting for non-controlling interest;
E. Use of certain estimates;

Question 4

What are elective exceptions to the retrospective application of IFRS1?

Answer 4

A.	Business combinations;
B.	Share-based payments;
C.	Insurance contracts;
D.	PPE;
E.	Leases;
F.	Employee benefits;
G.	Effects of foreign exchange rates;
H.	Compound financial instruments;
I.	Assets and Liabilities of subsidiaries and joint ventures.

Question 5

Which reconciliation statements of US GAAP to IFRS are required upon adoption of IFRS?

Answer 5

1. A reconciliation of U.S. GAAP equity to IFRS equity as of the transition date;
2. A reconciliation of the latest published U.S. GAAP equity to IFRS equity as of the most recent U.S. GAAP statement date;
3. A reconciliation of U.S. GAAP total comprehensive income to IFRS comprehensive income for the same period.

They are done to explain the impact of the adoption on equity and comprehensive income.