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

2.12 THE OPENING IFRS STATEMENT OF FINANCIAL POSITION

2.12.1 Procedures Concerning the Opening IFRS Statement of Financial Position

2.12.1.1 Focal Points

Much of the focus of IFRS 1 is on the opening IFRS statement of financial position. Its objective includes creating a starting point under IFRSs. The opening IFRS statement of financial position is the inception of accounting under IFRSs.233

Planning Point: The opening IFRS statement of financial position is also the starting point to compute profit or loss and comprehensive income under IFRSs. An undetected error at transition date may translate in error in the subsequent period, and beyond in the case of a noncounterbalancing error (i.e., if it does not self-correct over two periods). Once the entity detects it, it must retroactively correct and disclose it under IAS 8. As Paragraph 2.12.1.4 below explains, this correction is a different item from the restatement of the beginning balance of retained earnings due to first-time adoption.

Paragraph 2.13.5 following explains whether an entity must publish its opening IFRS statement of financial position.

2.12.1.2 Advance Planning

The selection of a transition date and consequently the opening IFRS statement of financial position is a key decision.

Planning Point: The general criterion for the application of the relevant IFRSs in recognizing and measuring assets and liabilities at transaction date may involve lengthy and costly calculations. The Basis for Conclusions of ...