What is IFRS 1 – First time Adoption of International Financial Reporting Standards?
The preparation of IFRS compliant financial statements in the first year of adoption is guided by IFRS 1, First Time Adoption of International Financial Reporting Standards. This financial reporting standard only applies once–at the time of changeover–and is mandatory guidance on the adoption of IFRS. The objective of IFRS 1 is to provide a consistent framework within which entities can start to apply IFRS. Generally, IFRS requires a company to present its IFRS statements as though it had always applied those standards. However, IFRS 1 provides practical guidance to alleviate some of the burden of recasting history. It also provides optional exemptions relating to some items, such as property, plant and equipment valuation, business combinations, and cumulative translation adjustment.
