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IFRS 1 — First-time Adoption of International Financial Reporting Standards

Effective date:

First effective as Canadian GAAP under Part I for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011, except for subsequent amendments.  Earlier application of Part I was permitted.

Published by the IASB:

November 2008

Included in Part I of CPA Canada Handbook:

January 2010

Overview

IFRS 1 First-time Adoption of International Financial Reporting Standards sets out the procedures that an entity must follow when it adopts IFRS for the first time as the basis for preparing its general purpose financial statements. The IFRS grants limited exemptions from the general requirement to comply with each IFRS effective at the end of its first IFRS reporting period.

IFRS 1 is applicable for Canadian entities adopting IFRSs and was the basis for the first IFRS financial statements prepared by the many Canadian entities who were required to adopt IFRS in 2011.  This standard also forms the required basis of accounting for all future adoptions of IFRS by Canadian entities. The general rule for first-time adoption is retrospective application but IFRS 1 does contain a number of elective and mandatory exemptions which permit, or require, an alternative treatment for certain types of transactions.

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:

1. presented its most recent previous financial statements:

  • in accordance with national requirements that are not consistent with IFRSs in all respects;
  • 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;
  • containing an explicit statement of compliance with some, but not all, IFRSs;
  • in accordance with national requirements inconsistent with IFRSs, using some individual IFRSs to account for items for which national requirements did not exist; or
  • in accordance with national requirements, with a reconciliation of some amounts to the amounts determined in accordance with IFRSs; prepared financial statements in accordance with IFRSs for internal use only, without making them available to the entity’s owners or any other external users;

2. prepared a reporting package in accordance with IFRSs for consolidation purposes without preparing a complete set of financial statements; or
3. did not present financial statements for previous periods.

Under IFRS 1, an entity shall explain how the transition from previous GAAP to IFRSs affected its reported financial position, financial performance and cash flows.

History of IFRS 1

The following table shows the history of this standard subsequent to the adoption of IFRS in Canada.

Date1

Development

Comments

Included in Part I of the CPA Canada Handbook2

January 2010

Part I of the CPA Canada Handbook issued

Effective for interim and annual financial statements relating to fiscal years beginning on or after January 1, 2011. Earlier application is permitted.

January 2010

January 29, 2010

Amended by Limited Exemption from Comparative IFRS 7 Disclosures for First-time Adopters (Amendment to IFRS 1)

Paragraphs 39D and E3 have been added to this standard to provide first-time adopters the same relief on transition to IFRSs that those already applying IFRSs received on adopting the March 2009 amendment to IFRS 7 Financial Instruments: Disclosures. A consequential amendment has been made to paragraph 44G of IFRS 7.

These amendments regarding additional exemptions for first-time adopters are effective for annual periods beginning on or after July 1, 2010. Earlier application is permitted.

April 2010

May 6, 2010

Amended by Improvements to IFRSs

Paragraphs 27 and 32 have been amended and paragraph 27A added to clarify how changes in accounting policies should be addressed by a first-time adopter when those changes occur after the publication of the entity's first interim financial report. Paragraphs 31B and D8B have been added and paragraphs D1(c) and D8 have been amended to extend the scope of the deemed cost exemption to an event-driven fair value and to entities with operations subject to rate regulation. These amendments are effective for annual periods beginning on or after January 1, 2011. Earlier application is permitted.

July 2010

December 20, 2010

Amended by Severe Hyperinflation and Removal of Fixed Dates for First-time Adopters (Amendment to IFRS 1)

Paragraphs 31C and D26-D30 have been added and paragraph D1 amended to provide guidance for entities emerging from severe hyperinflation, and paragraphs B2 and D20 have been amended to provide relief for first-time adopters of IFRS from having to reconstruct transactions that occurred before their date of transition to IFRS.

These amendments are effective for annual periods beginning on or after July 1, 2011. Earlier application is permitted.

March 2011

March 13, 2012

Amended by Government Loans (Amendments to IFRS 1)

Paragraphs 39N, 39O and B10-B12 have been added and paragraph B1 has been amended to permit first-time adopters to apply the requirements in IFRS 9 Financial Instruments and IAS 20 Accounting for Government Grants and Disclosure of Government Assistance prospectively to government loans existing at the date of transition to IFRS.

The amendments are effective for annual periods beginning on or after January 1, 2013. Earlier application is permitted.

May 2012

May 17, 2012

Amended by Annual Improvements to IFRSs 2009-2011 Cycle

Paragraphs 4A-4B and 23A-23B have been added to permit the repeat application of IFRS 1. Paragraph D23 has been amended to clarify the borrowing costs exemption relating to costs capitalized on qualifying assets before the transition to IFRS.

Effective for annual periods beginning on or after January 1, 2013. Earlier application is permitted.

August 2012

December 12, 2013

Amended by Annual Improvements to IFRSs 2011–2013 Cycle

This amendment to the Basis for Conclusions clarifies that an entity, in its first IFRS financial statements, has the choice between applying an existing and currently effective IFRS or applying early a new or revised IFRS that is not yet mandatorily effective, provided that the new or revised IFRS permits early application. An entity is required to apply the same version of the IFRS throughout the periods covered by those first IFRS financial statements.

Effective for annual periods beginning on or after July 1, 2014.  Earlier application permitted.

March 2014

De­cem­ber 8, 2016

Amended by Annual Improvements to IFRS Standards 2014–2016 Cycle

This amend­ment deletes the short-term exemptions in paragraphs E3–E7 of IFRS 1, because they have now served their intended purpose.

Effective for annual periods beginning on or after January 1, 2018.

March 2017

Notes

  1. For further details of relevant developments prior to this, please refer to our Deloitte Global section.
  2. Newly issued, amended or revised IFRSs are part of Canadian GAAP only after they are approved by the Accounting Standards Board in accordance with its due process.

The above summary does not include details of consequential amendments made as the result of other projects.

Related Interpretations

  • None

Related IFRIC Agenda Rejection Notices

The rejection notices are available in our Deloitte Global section.

  • IFRS 1 — Repeat application of IFRS 1 (September 2010)

  • IFRS 1 — Accounting for costs included in self-constructed assets on transition (May 2010)

  • First-time Adoption of International Financial Reporting Standards (October 2004)

AcSB’s IFRS Discussion Group meetings

Amendments under consideration

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.