IFRS PRACTICAL IMPLEMENTATION GUIDE AND WORKBOOK

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Wiley lFRS : Practical Implementation Guide and Workbook

IFRS in its "first IFRS financial statements." Deemed cost. An amount substituted for "cost" or "depreciated cost" at a given date. In the subsequent period , depreciation or amortisa tion is based on such deemed cost on the premise that the entity had initially recognised the asset or liability at the given date and that its cos t was equal to the deemed cost. Fair value. The amount for which an asset could be exchanged, or a liability settled, between knowledgeable, willing parties in an arm's -length transaction. First IFRS fina ncial statements . The first annual financial statements in which an entity adopts IFRSs by an explicit and unreserved statement of compliance with IFRS. Fi rs t-time adopter (of IFRS). Term used for an entity that presents its "first IFRS financial statements" in the period in which it does so. Internationa l Financial Reporting Standards (IFRS). Collective name for the Standards issued by the International Account ing Standards Soard (lASS) and the interpretations issued by the International Financial Reporting Interpretations Committe e (IFRIC). They also include all previous standards (lAS) issued by the International Accounting Standards Committee (lASC), the lASS ' s predecessor standard-setting body, and the interpretations issued by the erstwhile Standards Interpretations Committee (SIC) and adopted by the lASS. Opening IFRS balance shee t. The balance sheet prepared in accordance with the requir e– ments of IFRS I as of the "date of transition to IFRS." (Since IFRS I only requires that a first– time adopter prepare an opening balance sheet, as opposed to present an opening balance sheet, whether this balance sheet is publish ed along with the "first IFRS financi al statements" or not, it would still be considered an opening IFRS balance sheet.) Previous GAAP. Refers to the basis of accounting (say, national standards) that a first-time adopter used immediately prior to IFRS adoption. Reporting date. The end of the latest period covered by financial statements or by an interim financial report. (For IFRS I, this is another critical date since, based on this date, a first-time adopter determine s accounting policies to be applied in the prepar ation of the opening IFRS balance sheet; these policies have to be compliant with IFRS effective on that date.) 4. DEEMED EXCEPTIONS TO THE "FIRST-TIME ADOPTER" RULE 4.1 In a case where an entity's financial statements in the previous year contained an explicit and unreserved statement of compliance with IFRS but in fact did not fully comply with all aspects of IFRS, such an entity would not be considered a first-time adopter for the purposes of IFRS I. In other words, disclosed or undisclosed departures from IFRS in previou s year' s financial statements of an entity that has made an exp licit and unreserved statement of IFRS compliance would be treated by IFRS I as "errors" that warrant correction under lAS 8. 4.2 IFRS I identifies three instances, including the one described above, and categorically states that in such cases, this Standard does not apply. These deemed exceptions are • When an entity presented its financial statements in the previous year that contained an explicit and unreserved statement of compliance with IFRS and auditors qualified their report on those financial statements • When an entity in the previous year presented its financial statements under national require– ments (i.e., its national GAAP ) along with another set of financial statements that contained an explicit or unreserved statement of compliance with IFRSs and in the current year it dis– continues this practice of presenting under its national GAAP and presents only under IFRS • When an entity in the previous year presented its financial statements under national require– ments (its national GAAP) and those financial statements contained an explicit and unre– served statement of [FRS compliance 5. OPENING IFRS BALANCE SHEET 5.1 An entit y adopting IFRS for the first time is obliged, under this Standard, to prepare an opening balance sheet on the date oj transition to IFRS. This opening IFRS balance sheet serves as the starting point for the entity's accounting under IFRS. Although the requirement under IFRS I is