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IFRS 1 - Summary 1 - IFRS 1(Version issued November...

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Unformatted text preview: IFRS 1 (Version issued November 2008 & effective as of July 1“, 2009) Reasons for issuing IFRS: - lFRS 1 replaced SIC-8 (First-time Application for IASs) as the primary basis of accounting Main Features of IFRS - It requires an entity to: (1) Recognize all assets and liabilities whose recognition is required by lFRSs (2) Not recognize items as assets or liabilities if lFRSs do not permit such recognition (3) Reclassify items that it recognized under previous GAAP as one type of asset, liability or component of equity, but are a different type of asset, liability or component of equity under lFRSs (4) Apply lFRSs in measuring all recognized assets and liabilities. - lt grants limited exemptions from these requirements (where the costs exceed the benefits for users of financial statements) - It requires disclosers to explain how the entity went from GAAP to IFRS Scope of IFRS - Financial statements in accordance with lFRSs are an entity’s first financial statements if they: - presented its most recent previous financial statements — prepared financial statements in accordance with lFRSs for internal use only, without making them available to the entity’s owners or any other external owners (2010) — prepared a reporting package in accordance with lFRSs for consolidation purposes without preparing a complete set of financial statements - did not present financial statements for previous periods - This IFRS only applies when an entity first adopts IFRS - This IFRS does not apply to changes in accounting policies made by an entity that already uses lFRSs Accounting Policies - an entity shall use the same accounting policies in its opening IFRS statement of financial position and throughout all periods presented in its first IFRS statement. - An entity shall not apply different versions of lFRSs that were effective at earlier dates — The transitional provisions in other lFRSs apply to changes in accounting policies made by an entity that already uses lFRSs: do NOT apply to a first-time adopter’s transition to lFRSs - the accounting policies that an entity used in its opening IFRS statement of financial position may differ from those that it used for the same date using its previous GAAP (adjustments shall be recognized in retained earnings or the appropriate category of equity) Estimates - An entity’s estimate in accordance with lFRSs shall be consistent with estimate made for the same dates in accordance with previous GAAP (after adjustments made as a result of different accounting policies) - an entity made need to make estimates in accordance with lFRSs f” r a specific date that were . required at that date under previous GAAP Exemptions from other lFRSs - An entity may elect to use one or more of the exemptions contained in Appendices C—E - Some exemptions refer to fair value; the entity shall apply the definition of fair value in Appendix A Presentation and Disclosure - There are NO exemptions when it comes to presentation and disclosure Comparative Information - An entity first lFRS financial statements shall include at least: 3 statements of financial position, 2 statements of comprehensive income, 2 separate income statements, 2 statements of cash flows and 2 statements of changes in equity and related notes, including comparative information Non-lFRS comparative information and historical summaries _ - This lFRS does NOT require the presentation of historical summaries of selected data for periods before the first period for which they present full comparative information in accordance with lFRSs Explanation of transition to lFRSs - An entity shall explain how the transition from previous GAAP to lFRSs affected its reported financial position, financial performance and cash flows Reconciliations - An entity’s first lFRS financial statements shall include: — reconciliations of its equity reported in accordance with previous GAAP to its equity in accordance with lFRS (both for the date of transition to lFRS, Jan. 1, 2011 & the end of the latest period presented in the entity’s most recent annual financial statements in accordance with previous GAAP, Dec. 31, 2010,. - A reconciliation to its total comprehensive income in accordance with lFRSs for the latest period in the entity’s most recent annual financial statements, Dec. 31, 2010,. - The reconciliations shall give sufficient detail to enable users to understand the material adjustment to the statements of financial position and comprehensive income — IAS 8’s requirements for disclosures about changes in accounting policies do not apply in an entity’s first lFRS financial statements Designation of Financial Assets or Financial Liabilities - An entity can designate a previously recognized financial asset (or liability) as a financial asset (or liability) measured at fair value through profit or loss and the carrying amount in previous statements Use of fair value as deemed cost - If an entity uses a deemed cost in its opening financial statements, the entity shall disclose: (1) The aggregate deemed cost (previous GAAP carrying amount) of those investments, (2) The aggregate deemed cost (fair value) of those investments, and (3) The aggregate adjustment to the carrying amounts reported under previous GAAP Interimfjnansflgm - Each interim financial report shall include (1) A reconciliation of its equity in accordance with pervious GAAP at the end of that comparable interim period to its equity under lFRSs at that date and (2) A reconciliation to its total comprehensive incomes in accordance with lFRSs for that comparable interim period - IAS 34 requires minimum disclosures, which are based on the assumption that users of the interim financial reports also have access to the most recent annual financial statements ...
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