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Amendment to IFRS 1: Entities Adopting IFRSs Prior to the Issue of IFRS 1

Date recorded:

The Board agreed to an amendment to IFRS 1.39C [the effective date of the 'deemed cost exemptions approved in February 2010] that would permit entities that had adopted IFRS in periods before the effective date of IFRS 1 to use the cost base established by an event-driven revaluation as deemed cost in the entity's 'first IFRS financial statements'. The situation arises most obviously in China, where many companies moved to IFRS/ IAS prior to the issue of IFRS 1 and consequently used SIC-8 to accomplish the move.

The Board agreed that the sort of event-driven revaluations described in the amendment approved in February 2010 had occurred, but (without the amendment now under discussion) would not be within the scope of IFRS 1. The Board also clarified that the amendment only applied to establishing deemed cost in the first IAS/IFRS financial statements: it was not an invitation to revisit IFRS elections made subsequent to adoption of IFRS.

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