About this Course

This seminar provides an overview of the complex issues facing first-time adopters by using practical case studies including a discussion of available strategies for deciding and choosing accounting policies and the optional exemptions in applying the chosen accounting policies at transition date.

IFRS 1 First-time Adoption of International Financial Reporting Standards sets out all the rules to transform previous GAAP to IFRS. These rules cover the recognition, measurement and disclosure principles that must be complied with in the entity’s first IFRS financial statements.

IFRS 1 requires restatement of the entire statement of financial position as at transition date (this is the beginning of the comparative period).  The restatement process often involve recognizing assets and liabilities that were not recognised under previous GAAP, de-recognising certain assets and liabilities that were recognised under previous GAAP, reclassification of assets and liabilities, and re-measurement of assets and liabilities. IFRS1 uses “retrospective concept” in the restatements processes describe above, however IFRS1 contains various mandatory exceptions and optional exemptions from the principle of retrospective restatement.

Programme Outline 

1. Fundamental Principles of IFRS 1

• Determining the transition date
  
• The “retrospective approach”
  
• Introduction to retrospective approach and exceptions
  
• Recognition & measurement of assets and liabilities
  
• Preparing the opening IFRS statement of financial position at transition date
  

2. Mandatory Exceptions to retrospective approach under IFRS 1:

• Use of estimates
  
• Derecognition of financial assets and financial liabilities
  
• Hedge accounting
  
• Non-controlling interests
  

3. Optional Exemptions to retrospective approach to IFRS1:

4. Strategies for dealing with business combinations (IFRS 3)

• How to decide whether to apply IFRS 3 prospectively or retrospectively
  
• Interaction between IFRS 3 and consolidated financial statements
  
• Adjustment to goodwill arising from:
  

               - Recognition and measurement of intangible assets

               - Impairment test at date of transition

5. How to choose which optional exemptions from other IFRSs

• Share-based payment transactions
  
• Insurance contracts
  
• The exception rules in using fair value as deemed cost in:
  

              - Property plant and equipment

              - Investment property

              - Intangible assets

              - Rate regulated activities

              - Event driven – Initial public offering or privatisation

              - Oil and gas properties in development or production phases

              - Investments in subsidiaries, jointly controlled entities and associates

• Assets and liabilities of subsidiaries, associates and joint ventures
  
• Leases – How and when to determine an agreement containing a lease (IFRIC 4)
  

               - Contrast with leasehold property – no exemption from retrospective approach

• Employee benefits
  
• Cumulative translation differences
  
• Compound financial instruments
  
• Designation of previously recognized financial instruments
  
• Decommissioning liabilities included in the cost of property, plant and equipment (IFRIC 1)
  
• Fair value measurement of financial assets or financial liabilities at initial recognition
  
• Financial assets or intangible assets accounted for under IFRIC 12 Service concession arrangements
  
• Borrowing costs
  
• Transfers of assets from customers
  
• Extinguishing financial liabilities with equity instruments
  
• Disclosures about financial instruments – short-term exemption from IFRSs
  
• Presentation and Disclosure Requirements
  
• Disclosure of comparatives – converting previous GAAP to IFRS
  
• Preparing and presenting reconciliation statements for:
  

              - Statement of financial position

              - Statement of profit or loss and other comprehensive income

• Explanation for effect of difference between previous GAAP and IFRS
  
• Interim financial statements
  
• Specific Issues
  
• Accounting policy selection
  
• Fair value measurements at the date of transition to IFRSs
  
• Impairment testing at the transition date (goodwill testing)
  
• Consolidations, associates & joint ventures
  
• Preparing the initial comparative IFRS financial statements
  
• Requirements for the use of hedge accounting
  
• Reporting liabilities (deferred tax, provisions, leases, pensions, etc.)
  
• Other issues to consider
  
• Choosing accounting policies under IFRSs
  
• Deciding which optional exception to implement the chosen accounting policies
  
• Consider possible impact to business operation
  
• Implementing the changes and staff training
  
• Collection of accounting data
  
• Date of valuation report
  
• Operating parallel reporting systems for the comparative period
  

Intended For

This Intermediate to Advanced Level programme is suitable for Practising Accountants, Non-Practising Accountants and Audit Professionals.

Those who are keen to seek clarity and achieve a deeper understanding of the complex issues facing first-time adoption of accounting policies are welcome to attend.

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