The Board confirmed its November 2001 tentative decisions and clarified the following:

• An entity shall not recognise in the opening balance sheet internally generated intangible assets that exist at the date of transition to IFRS (that is, the beginning of the earliest period presented in the first set of IFRS financial statements) if it does not have sufficient information and documentation at the date of transition to IFRS to demonstrate that the recognition requirements of IAS 38, Intangible Assets, were met at a previous point in time. However, if an enterprise can demonstrate that it had, in the past, the systems and the documentation in place to assess whether an internally generated intangible asset arising from development costs met the IAS 38 recognition requirements, it will recognise that internally generated intangible asset in its opening balance sheet measured at the amount of the accumulated costs incurred since the IAS 38 recognition criteria were met (less any subsequent accumulated amortisation and impairment loss).
• At the November 2001 meeting, the IASB tentatively agreed that if an entity cannot restate the measurement of an asset or a liability in the opening balance sheet under IFRS without undue cost and effort, it shall measure this asset or liability at its fair value at the date of transition to IFRS. This amount would become the deemed cost for the asset or the liability for subsequent measurement purposes. At the February 2002 meeting, the IASB tentatively agreed to restrict this requirement to items of property, plant, and equipment and investment properties accounted for under the cost model (under the alternative in IAS 40, Investment Property). The reason is that, given the reliefs already granted (such as for business combinations and the new relief indicated below), the IASB could not identify other items in the opening balance sheet, or circumstances, where it could reasonably be argued that remeasurement under IFRS cannot be done without undue cost or effort.
• The IASB tentatively agreed to grant relief from the requirement to restate the initial cost of an asset under IFRS in the opening balance sheet, where determination of the cost under local GAAP resulted from a one-off remeasurement to fair value in the context of, for example, a past privatisation or IPO that established a deemed cost at the time. However, the IASB rejected providing further relief where ad hoc revaluations or ad hoc adjustments for inflation were made.
• Where decommissioning and site restoration costs are recognised in the opening balance sheet under IAS 37, Provisions, Contingent Liabilities and Contingent Assets, and these amounts form part of the cost of a related asset, the amount to be added to the cost of the asset at the date of transition to IFRS shall be equal to the amount of the provision that is recognised. The adjusted carrying amount of the asset will be the basis for subsequent depreciation and impairment tests;
• If an entity adopts a policy of capitalising borrowing costs as part of the cost of qualifying assets in its first IFRS financial statements, the entity shall ensure that all borrowing costs capitalised are determined under IAS 23, Borrowing Costs, retrospectively.
• Consistent with the tentative decisions under the project on Business Combinations, an entity shall not recognise any negative goodwill as a separate item in its opening balance sheet. Any negative goodwill separately recognised under local GAAP shall be eliminated against retained earnings.
• To determine IFRS estimates for any comparative period, an entity shall assess whether the local GAAP estimates were determined in a way consistent with those that would have been required under IFRS. Adjustments to previous local GAAP estimates would be required only if the methodology to determine those estimates would differ between local GAAP and IFRS or if local GAAP did not require those IFRS estimates. In the latter case, the estimates to be recognised shall reflect information available when an entity prepares its first IFRS financial statements unless a change in the estimate can be related to some identifiable adjusting events that occurred during any previous comparative period. Adjustments to local GAAP estimates in comparative periods to bring them into conformity with IFRS should be accounted for against retained earnings in the opening balance sheet.
• An entity shall disclose a reconciliation (and explanation of reconciling items) of net profit or loss of any comparative period determined under local GAAP and IFRS, as well as a reconciliation (and explanation of reconciling items) of equity at the beginning of the latest financial year presented under IFRS;
• The effective date considered for the Standard is 1 January 2003. If the final Standard is approved before that date, earlier adoption would be permitted.