IASB proposes amendments to IFRS 1
26 Aug, 2010
The International Accounting Standards Board (IASB) today published for public comment proposed amendments to IFRS 1 'First-time Adoption of International Financial Reporting Standards'. The proposal would amend IFRS 1 by replacing references to a fixed transition date of 1 January 2004' with the date of transition to IFRSs'. As a result, entities adopting IFRSs for the first time would not have to restate derecognition transactions that occurred before the date of transition to IFRSs. In addition, first-time adopters would also not have to recalculate day 1' differences on initial recognition of financial instruments, where the transaction occurred before the date of transition to IFRSs.
The Basis for Conclusions states:
IFRS 1 First-time Adoption of International Financial Reporting Standards requires a first-time adopter to restate past derecognition transactions that occurred after 1 January 2004. This requirement was included in IFRS 1 as a result of the revision to IAS 39 Financial Instruments: Recognition and Measurement in 2003, to place entities then adopting IFRSs for the first time in the same position as existing IFRS users at that time. As time passes, the fixed transition date of 1 January 2004 becomes more remote and increasingly less relevant to the financial reports of additional jurisdictions that will adopt IFRSs.
The exposure draft Removal of Fixed Dates for First-time Adopters is open for comment until 27 October 2010. It can be accessed via the IASB's website. The IASB's press release is available here (PDF 98k). Our related project page offers a summary of the discussions leading up to the publishing of the exposure draft.
