IFRS 1 — Repeat application of IFRS 1

Date recorded:

The Committee considered a request to clarify whether an entity can apply IFRS 1 First-time Adoption of International Financial Reporting Standards more than once in a situation that an entity previously applied IFRS 1 and reported in accordance with the IFRSs in order to comply with foreign listing requirements. Subsequently, the entity delisted and no longer presented its financial statements in accordance with IFRSs, reporting only in accordance with its national GAAP. As the reporting requirements in the entity's local jurisdiction change from national GAAP to IFRS, the entity is again required to present its financial statements in accordance with IFRSs.

The members of the Committee unanimously supported the possibility to apply the IFRS 1 requirements more than once. They argued that it may be difficult to resume presenting financial statements in accordance with IFRSs after a long period of time if IFRS 1 is not applied. In their opinion, the original intend of IFRS 1 was to apply IFRS 1 if and only if the most recent financial statements were not prepared in full compliance with IFRSs. Following a brief discussion, the Committee decided to propose an amendment that would require entities in that situation to apply IFRS 1.

Nonetheless, some Committee members were concerned about possible misuse and suggested tightening of wording of any amendment to avoid structuring. Some Committee members even suggested removing the reference to 'First-time adoption' and rather referring to 'Adoption of IFRSs'. Nonetheless, such a move was perceived being a too big change that would not be in scope of annual improvement process.

Some Committee members were concerned with the guidance provided in the IFRS for SMEs and suggested that the guidance in the IFRS for SMEs shall be amended. The Chairman noted that the Committee has no power to interpret IFRS for SMEs.

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