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

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2.11 ACCOUNTING ESTIMATES

2.11.1 Basic Rule

Entities must change amounts they estimated under previous GAAP at the transition date or at the end of the comparative period under three circumstances only. Firstly, they must correct any error that existed in those estimates. Secondly, they must operate any adjustment that is necessary to comply with IFRSs as opposed to previous GAAP. Thirdly, they must consider any additional element that IFRSs may require to formulate estimates at the transition date or at the end of comparative period(s) and that was not necessary under previous GAAP. Apart from the above situations, the entity must keep the estimates made at transition date and at the end of the comparative periods under previous GAAP.204

2.11.2 The IAS 10 Override

For first-time adopters, IFRS 1 partially overrides IAS 10, with reference to new information that an entity obtains after the transition date on the basis of which it will reformulate estimates it made under previous GAAP. The entity must always treat subsequent events as nonadjusting events, whereas IAS 10 would ordinarily qualify those situations as adjusting events when they provide evidence of conditions that exist at the reporting date. Therefore, those events affect the period in which the entity revises the estimates and not the opening statement of financial position. The same principle applies to events subsequent to the end of the comparative period regarding conditions that existed at the end of the comparative ...

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