The Handbook to IFRS Transition and to IFRS U.S. GAAP Dual Reporting

2.16 RECONCILIATIONS AND DISCLOSURES

2.16.1 General Rule

As a rule, presentation and disclosures prescribed by all IFRSs apply to the first IFRS financial statements. In addition, IFRS 1 mandates an explanation of the effects of the transition to IFRSs, though reconciliations and specific disclosures.396 The rationale is threefold: understanding the fresh start represented by the opening IFRS statement of financial position, restating comparative period on an IFRS mode, and permitting resetting the model for financial analysis under IFRSs.397

This chapter places the specific disclosures that IFRS 1 requires in the paragraphs that treat the related items.

2.16.2 IFRS 1 Reconciliations

IFRS 1 requires specific previous GAAP to IFRSs reconciliations of the statement of financial position, the statement of comprehensive income (or the income statement, if the entity did not report comprehensive income under previous GAAP), and the statement of cash flows if the entity presented it under previous GAAP. Equity reconciliation refers to the transition date and the end of latest comparative period. Comprehensive income or profit or loss reconciliation covers the latest period in the most recent financial statements, i.e., under previous GAAP.398

Planning Point: The Basis for Conclusions of IFRS 1 explains that if previous GAAP do not contain the notion of total comprehensive income, reconciliation would start from the aggregate that under previous GAAP is equivalent to total comprehensive ...