IFRS 1:

First-time Adoption of
International Financial Reporting
Standards

S hantanu

G oyal
 Major Parts of IFRS 1

I. Objective & Scope

II. What is first IFRS financial Statement
III. Recognition & Measurement
IV. Exemptions
 Objective
The objective of this IFRS is to ensure
transparency to users and comparability over all
period presented for entity’s first IFRS financial
statements as well as its interim financial reports
for the part of the period covered by its first IFRS
financial statements.

Scope
 What is first IFRS financial
Statement

An entity’s first IFRS financial statements are the

first annual financial statements in which the
entity adopts IFRSs, by an explicit and
unreserved statement in those financial
statements of compliance with IFRSs.
Examples for First IFRS Financial Statement

 The previous year financial statements does not complies with

all IFRS in their entirety or even if they are in conformity an
explicit and unreserved statement that they complied with IFRS
is not attached/stated.
 Such IFRS financial statements are not prepared for entity’s
owners or other external users.
 Prepared for consolidation purposes without a complete financial
set as defined in IAS-1.
 Did not presented any financial statement for the previous
periods.
This IFRS does not apply on the following:

 stops presenting financial statements in accordance with

national requirements, having previously presented them as
well as another set of financial statements that contained an
explicit and unreserved statement of compliance with IFRSs.
 Financial statement of previous year contained an explicit and
unreserved statement even if auditor have qualified their report.
 Change in accounting policies by an entitiy that has already
adopted IFRS.
Recognition
&
Measurement
 Certain Terms
Some Important Dates

For financial year – 2011-12

Transition Date Convergence Date Reporting Date

1st April 2010 1st April 2011 31st March 2012

opening IFRS statement of financial position means an entity’s

statement of financial position at the date of transition to IFRSs.
Recognition
An entity shall prepare opening IFRS Statement and shall:

• Recognize, de-recognize and reclassify assets and liabilities

as required by IFRS
• Apply IFRSs in measuring all recognize assets and liabilities
• Any resulting adjustment shall be recognize in the retained
earning on the transition date and if appropriate, another
category of equity.
 Statements to be prepared
Reporting date-31st March 2012

2 2
2 2 Statements of Change in
3 Statements Separate
Balance-Sheets Statements of Statements of equity and related notes
of income Cash Flows including comparative
income
(if presented) information

1. As at 31st March 2011

2. As at 31st March 2012
As at 1st April 2010
 Historical Summary

Historical summary means comparative data presented by entities

for periods more than period of transition presented by entities, like
– per employee profit comparison of various years

No need to comply with this IFRS

And required to disclose:
 that the summary is not in accordance with IFRS
 nature of adjustments required to make it equivalent to
IFRS – quantification is not required
 Reconciliation
Entities first time adopting IFRS shall prepare reconciliation
statement to explain material adjustment from previous GAAP to
IFRS

 its equity = On transition date and on end of latest

financial period as per GAAP
 its income = On end of latest financial period as per
GAAP
 Cash Flow Statement = On end of latest financial period as per
(if entity presented) GAAP
if the entity recognized = Disclosures that IAS 36 Impairment
or reversed any of Assets would have required these
impairment losses in its losses or reversal as on the date of
opening IFRS statement transition
of financial position
 Interim Financial Reports
if the entity presented an interim financial report for the
comparable interim period of the immediately preceding financial
year, its interim report shall include:

1. A reconciliation of its equity at end of comparable interim period

2. Reconciliation of its income
 Exception to RETROSPECTIVE Application

An entity shall apply the following exceptions:

(a) derecognition of financial assets and financial liabilities

(paragraphs B2 and B3);
(b) hedge accounting (paragraphs B4–B6), and
(c) non-controlling interests (paragraph B7
Exemptions at the option of entity
An entity may elect to use one or more of the following
exemptions:
(a) share-based payment transactions (paragraphs D2 and D3);
(b) insurance contracts (paragraph D4);
(c) fair value or revaluation as deemed cost (paragraphs D5–D8);
(d) leases (paragraph D9);
(e) employee benefits (paragraphs D10 and D11);
(f) cumulative translation differences (paragraphs D12 and D13);
(g) investments in subsidiaries, jointly controlled entities and
associates (paragraphs D14 and D15);
(h) assets and liabilities of subsidiaries, associates and joint
ventures (paragraphs D16 and D17);
Cont…..
Cont…..

(i) compound financial instruments (paragraph D18);

(j) designation of previously recognized financial instruments
(paragraph D19);
(k) fair value measurement of financial assets or financial liabilities
at initial recognition (paragraph D20);
(l) decommissioning liabilities included in the cost of property,
plant and
equipment (paragraph D21);
(m) financial assets or intangible assets accounted for in
accordance with
IFRIC 12 Service Concession Arrangements (paragraph D22);
and
(n) borrowing costs (paragraph D23).
THANK YOU