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IFRS 1 — Revaluation basis as deemed cost

Date recorded:

The IFRIC considered the comment letters received to the proposed amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards related to event-driven revaluations after the transition date but before the end of the entity's first IFRS reporting period.

The IFRIC discussed several specific issues raised by the constituents. The IFRIC reconfirmed the earlier Board decision that did not allow roll-back adjustment for comparative data. Even though some IFRIC members saw merit in a roll-back approach (data more useful than other deemed costs), the staff noted that no new arguments had been presented that would justify the change of the decision made by the Board at the June 2009 Board meeting.

The IFRIC agreed with the staff to clarify the wording of the amendment to better capture the rationale behind the amendment.

The IFRIC also agreed to specify that adjustments related to event-driven revaluation should be recognised directly in retained earnings (or a specific category of equity).

The IFRIC also agreed to amend the transition requirements to better reflect the intention of the Board – to allow existing IFRS preparers, whose restructuring for a privatisation occurred in the past, but within the period covered by the first set of IFRS financial statement prepared in accordance with IFRS 1 to apply the proposed amendment retrospectively.

Some IFRIC members did not feel comfortable with the decrease in consistency and comparability of the financial statements. On the other hand, a majority of IFRIC members acknowledged IFRS 1 already contains exemptions intended to facilitate first time adoption of IFRSs.

On that basis, the IFRIC recommended to the Board to finalise the amendments subject to editorial drafting suggestions.

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