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

2.5 FIRST IFRS FINANCIAL STATEMENTS

2.5.1 Terminology

First-time adoption of IFRSs, as opposed to first-time application, is the expression that the IASB elected to mean the presentation of the first set of IFRS financial statements.11 First IFRS financial statements, whether annual or interim, are those that use IFRSs in their entirety and include a statement where the reporting entity unambiguously represents such an adoption without any reservation.12 Paragraph 2.6 following and Paragraph 2.7 following explain the intricacies of this point.

The SEC uses the expression transition year to mean what, in IFRS 1 terms, is the first IFRS reporting period.13

2.5.2 First versus Subsequent IFRS Financial Statements

The first IFRS financial statements are those in which an entity states an explicit and unreserved compliance with IFRSs for the first time.14 Paragraph 2.7 following goes into this in detail.

Discontinuation in respect of the past is of the essence. Before the first IFRS financial statements, an entity should not have used IFRSs by an explicit and unreserved statement of compliance, or presented any financial statements, or been in one of the circumstances that do not lead to a situation of first-time adoption. Alternatively, the context in which the company uses IFRSs should be such as to create the conditions for first-time adoption.15 An entity that did not present prior financial statements must disclose this fact.16

IFRS financial statements following the first IFRS ...