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

2.17 EXCEPTIONS TO THE RETROSPECTIVE APPLICATION OF OTHER IFRSS

2.17.1 Derecognition of Financial Assets and Financial Liabilities

2.17.1.1 Prohibition to Reinstate Derecognized Transactions

IFRS first-time adopters that adopt IFRS 9 early and that migrate in annual periods beginning on or after July 1, 2011 (or before, if they adopt the December 2010 amendment to IFRS 1 early426) can follow a special discipline concerning derecognition of nonderivative financial assets and nonderivative financial liabilities. The opening IFRS statement of financial position excludes only items whose derecognition occurred on the date of transition and that met the related requirements under IFRS 9. Conversely, they do not have to reinstate transactions that occurred before the transition date and that would not have been accounted for as derecognition under IFRS 9. IFRS 1 grandfathers them. However, an entity may elect to apply IFRS 9 from a past date, on condition that it had gathered contemporaneous information concerning relevant transactions.427

Comment: Therefore, the first IFRS financial statements do not incorporate a past transfer of accounts receivable or a securitization that would qualify as a secured borrowing under IFRSs but as a sale under previous GAAP.428

Comment: Similarly, for ongoing IFRS entities, IFRS 9 does not apply to items that have been derecognized at the date of its initial application.429

2.17.1.2 Entities Migrating before July 1, 2011 That Adopt IFRS ...