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

2.6 ENTITIES AFFECTED BY IFRS 1

2.6.1 Which Companies Must and Which May Not Use IFRS 1

An IFRS first-time adopter, i.e., presenting first IFRS financial statements, must use IFRS 1 in its first IFRS annual financial statements.44

Comment: If a company does not use IFRS 1, it cannot denote its statements as the first IFRS financial statements. Consequently, statements in subsequent years will not formally be IFRS financial statements.

IFRS 1 is a one-time standard. Entities that already report under IFRSs cannot invoke special treatment under this standard.45 Paragraph 2.16.11 following illustrates the situation of a company that had already migrated to IFRS in a foreign market and then later decides to file under IFRS with the SEC. This company is no longer an IFRS first-time adopter.

2.6.2 Consolidated versus Separate versus Entity's Financial Statements

IFRS 1 applies to both consolidated and entity's own financial statements. It also applies to separate financial statements of a parent, investor, or joint venturer, if presented.

Planning Point: The use of the IFRS 1 exceptions at these three levels is independent of each other. However, Paragraph 2.19.10.9 following explains that using the IFRS 1 exemptions for parent and affiliates that migrate to IFRSs at different dates results in implicitly using the same exemptions. Paragraph 2.19.10.10 following explains the implications of using different combinations of these exemptions. Paragraph 2.18.16 following illustrates ...