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

2.7 COMPLIANCE WITH IFRSS

2.7.1 The Statement of Compliance with IFRSs

Upon IFRS first-time adoption, IFRS 1 requires that an explicit and unreserved statement of compliance with IFRSs, including all required disclosures, is made in primary financial statements for the first time.46 Such a declaration cannot have qualifications or departures.47 Of course, financial statements that represent compliance with local GAAP do not qualify, even though they may selectively follow some IFRSs.48 Furthermore, as the SEC Staff confirmed, a statement that there are no significant differences between primary GAAP used in the financial statements and IFRSs does not qualify.49

The very fact of declaring this conformity explicitly and unreservedly for the first time defines the first IFRS financial statements and triggers the first-time adoption event.50 This has several implications, as the following paragraphs explain.

2.7.2 Statement of Compliance with the IFRS for SMEs

IFRS for small and medium-sized entities requires an explicit and unreserved statement of compliance. Migration from full IFRSs to IFRS for SMEs is also possible, although the standard does make a distinction between previous GAAP and full IFRSs.51

2.7.3 First Time

As Paragraph 2.7.1 above explains, first-time adoption means the contemporaneous presence in the same financial statements for the first time of use of IFRSs and an explicit and unreserved statement of compliance with IFRSs.

Comment: On one hand, the expression ...