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

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2.14 EXCEPTIONS AND EXEMPTIONS IN THE CONTEXT OF COMPARABILITY

2.14.1 Categories of Exceptions and Exemptions

IFRS 1 requires retrospective application of accounting policies in the opening first IFRS statement of financial position. However, mainly on the grounds of cost/benefit or impracticability, it introduces certain derogations.

IFRS 1 identifies two groupings: 1) exceptions to the retrospective application of certain IFRSs, and 2) exemptions from some requirements of certain IFRSs.322 It then subdivides the exceptions into two main classes: estimates, and other exceptions.323 It also splits the second category, exemptions, into the exemption for past business combinations,324 other exemptions,325 and short-term exemptions.326 The classification has been evolving over time. Paragraph 2.14.5 following explains the rationales under such derogations in IFRS 1.

Comment: IFRS 1 is somewhat incongruent in the terminology it uses. On one hand, it generically uses the term “exceptions”,327 on the other hand it then separates them into exceptions and exemptions. Exceptions refer to departures from retrospective application of accounting policies or from certain comparative information. They are generally mandatory, although occasionally an entity may choose some optional variations.328 Exemptions indicate specific treatment, that is different from the ordinary norm, which is available to companies already applying IFRSs. They are optional.329 By contrast, Form 20-F and related ...

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