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Explanation Of Transition To IFRSs 1

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Explanation Of Transition To IFRSs 1

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Avatar 37a3bd7bc7328f0ead2c0f6f635dddf60615e676e6b4ddf964144012e529de45 answered

An entity shall explain how the transition from previous GAAP to IFRSs affected its reported financial position, financial performance and cash flows.

An entity that has applied IFRSs in a previous period, as described in paragraph , shall disclose:

(a) the reason it stopped applying IFRSs; and
(b) the reason it is resuming the application of IFRSs.

When an entity, in accordance with paragraph , does not elect to apply IFRS 1, the entity shall explain the reasons for electing to apply IFRSs as if it had never stopped applying IFRSs.

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. Financial statements in accordance with IFRSs are an entity’s first IFRS financial statements if, for example, the entity:
(a) presented its most recent previous financial statements:
(i) in accordance with national requirements that are not consistent with IFRSs in all respects;
(ii) in conformity with IFRSs in all respects, except that the financial statements did not contain an explicit and unreserved statement that they complied with IFRSs;
(iii) containing an explicit statement of compliance with some, but not all, IFRSs;
(iv) in accordance with national requirements inconsistent with IFRSs, using some individual IFRSs to account for items for which national requirements did not exist; or
(v) in accordance with national requirements, with a reconciliation of some amounts to the amounts determined in accordance with IFRSs;

To know more about IFRS please read the following article -> IFRS Details

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