1. In The Name Of ALLAH The Most
Compassionate , Ever Merciful
2. IFRS 1 :
First Time Adoption Of International Financial Reporting Standards
PRESENTER : MIRZA IMRAN ALI
3. 1960s
1970s
1990s
2000s
No international study group exist
First international standards-setting body International
Accounting Standards Committee (IASC),
IASC Formalizes and Expands its International affiliations
April, 2001 International Accounting Standards Committee
(IASC) to International Accounting Standards Board (IASB)
7. 01 Jan Date of
2012 Transition
01 Jan
2013
Date of
adoption
31 Dec Reporting
Date
2013
Use the same accounting policies for all periods presented in first IFRS financial statements
(except where specific relief given)
11. Compound instruments
Business combinations
Property, plant and equipment,
investment properties, intangibles
Designation of financial assets and
financial liabilities
Fair value measurement of financial
instruments at initial recognition
Employee benefits
Cumulative translation adjustment
Decommissioning liabilities
Transition date for subsidiaries,
associates and joint ventures
Comparatives for financial
Instruments
Share-based payments
Insurance contracts
Exploration costs
12. Exemption
Impact
Business combinations
Previous business combinations need not be restated
Property, plant and equipment,
investment properties,
intangibles
Fair value or revaluation as deemed cost
Employee benefits (IAS-19)
Unrecognised gains and losses at date of transition need not
be recognised
Cumulative translation
May be set to zero for all subsidiaries
differences (IAS-21)
Decommissioning liabilities
Adjustments to the asset cost required by IFRIC 1 need not be
(IFRIC-1)
applied to changes to the liability occurring before transition
13. Exemption
Impact
entities
Balances already reported by subsidiary to parent need
not be restated
Compound financial
instruments
Circumstances at inception, but equity element not
identified if liability is not outstanding
Designation of financial
assets and liabilities (IAS-39)
Designation as “at fair value through profit or loss” at
transition, where permitted
Comparatives for financial
instruments
Comparatives need not be restated for IAS 32 and IAS
39
Date of transition for some
14. Exemption
Share-based payments
Impact
Only apply IFRS 2 to share-based payments issued
after Nov 2002 and vested / settled by 1 January 2005
Insurance contracts
Comparatives need not be restated for IFRS 4
Exploration costs
Comparatives need not be restated for IFRS 6
Leases
Assessment of whether an arrangement contains a
lease need not be applied to periods before transition
date.
16. Mandatory exception - Estimates
Estimate
required by
previous GAAP?
YES
NO
Make estimate
reflecting conditions
at relevant date
Evidence of
error?
NO
YES
Use previous estimate
YES
Calculation consistent
with IFRS?
NO
Adjust previous
estimate to
reflect IFRS
23. ABC Limited presented its financial statements under the
national GAAP until 2009. It adopted IFRS from April 1,
2010 and is required to prepare an opening IFRS balance
sheet as at April 1, 2010. In preparing the IFRS opening
balance sheet of ABC Limited noted:
1.
Under its previous GAAP, had classified proposed dividend
of
Rs.5,00,000 as a current liability.
2. It had not made a provision for warranty of Rs. 200,000 in
the financial statements presented under previous GAAP
since the concept of “constructive obligation” was not
recognized under its previous GAAP.
3. In arriving at the amount to be capitalized as part of cost
necessary to bring an asset to its working condition, XYZ
Limited had not included Professional fees of Rs. 300,000
paid to architects at the time when the building it
currently occupies as its head office was being
constructed.
Required: Advise ABC Limited
on the treatment of all the
above items under IFRS1
24. Solution :
For opening IFRS balance sheet at April 1, 2010, ABC
Limited would need to make these adjustments to its balance
sheet at March 31, 2009, presented under IGAAP:
1. IAS 10 does not allow proposed dividend to be recognized
as a liability; but to be disclosed in the Notes . Indian GAAP
allowed proposed dividend to be treated as current liability.
Therefore proposed dividend of Rs.500,000 should be
disclosed in footnotes.
2. IAS 37 requires recognition of a provision for warranty
but
GAAP did not allow a similar treatment. Thus, a
provision for warranty of Rs.200,000 should be recognized
under IFRS-37.
3. IAS 16 requires all directly attributable costs of bringing
an asset to its working condition for its intended use to be
capitalized as part of carrying cost of property, plant and
equipment. Thus Rs.300,000 of architects’ fees should be
capitalized as part of Property, plant and equipment and
cumulative Depreciation needs to be provided.
25. Q : HL Limited is a first-time adopter under IFRS 1. The most
recent financial statements it presented under its previous
GAAP were as of December 31, 2011. It has adopted IFRS for
the first time and intends to present the first IFRS financial
statements as of December 31, 2012. It plans to present two
year comparative information for the years 2011 and 2012. The
opening IFRS statement of financial position should be
prepared as of
•
•
•
•
January 1, 2011
January 1, 2009
January 1, 2010
January 1, 2012
