Chapter 10 - First-time adoption of IFRS

Question 1

What standard covers first-time adoption of IFRS?

Answer 1

IFRS 1

Question 2

What is the purpose of IFRS 1 ?

Answer 2

Establish common guidelines and practices for entities preparing their financial statements under IFRS for the first time.

Basically a road map for how to move from GAAP to IFRS.

Question 3

What should an entity do in preparing IFRS statements of financial position for the first time?

Answer 3

Prepare an opening IFRS statement of financial position, including:

• Recognise all IFRS assets / liabilities
• Derecognise assets / liabilities if IFRS does not permit such recognition
• Reclassify assets or liabilities where needed under IFRS
• Apply IFRS in measuring all assets and liabilities.

Adjustments are recognised in retained earnings or equity reserve as appropriate.