Ifrs 1 first time adoption of ifrs

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<ul><li> 1. In The Name Of ALLAH The Most Compassionate , Ever Merciful</li></ul> <p> 2. IFRS 1 : First Time Adoption Of International Financial Reporting StandardsPRESENTER : MIRZA IMRAN ALI 3. 1960s1970s1990s2000sNo international study group existFirst international standards-setting body International Accounting Standards Committee (IASC),IASC Formalizes and Expands its International affiliationsApril, 2001 International Accounting Standards Committee (IASC) to International Accounting Standards Board (IASB) 4. Prepared most recent financial statementsConformity With national requirementYESConformity With Specific IFRSs NOStatement Containing Un-reserved Statement of ComplianceSpecific Reconciliation With IFRSsYES 5. 01 Jan Date of 2012 Transition01 Jan 2013Date of adoption31 Dec Reporting Date 2013Use the same accounting policies for all periods presented in first IFRS financial statements (except where specific relief given) 6. All Assets And Liabilities Required Under IFRSRecognizeDerecognizeMeasureReclassify 7. Compound instruments Business combinations Property, plant and equipment, investment properties, intangiblesDesignation of financial assets and financial liabilities Fair value measurement of financial instruments at initial recognitionEmployee benefits Cumulative translation adjustment Decommissioning liabilities Transition date for subsidiaries, associates and joint venturesComparatives for financial Instruments Share-based payments Insurance contracts Exploration costs 8. ExemptionImpactBusiness combinationsPrevious business combinations need not be restatedProperty, plant and equipment, investment properties, intangiblesFair value or revaluation as deemed costEmployee benefits (IAS-19)Unrecognised gains and losses at date of transition need not be recognisedCumulative translationMay be set to zero for all subsidiariesdifferences (IAS-21) Decommissioning liabilitiesAdjustments to the asset cost required by IFRIC 1 need not be(IFRIC-1)applied to changes to the liability occurring before transition 9. ExemptionImpactentitiesBalances already reported by subsidiary to parent need not be restatedCompound financial instrumentsCircumstances at inception, but equity element not identified if liability is not outstandingDesignation of financial assets and liabilities (IAS-39)Designation as at fair value through profit or loss at transition, where permittedComparatives for financial instrumentsComparatives need not be restated for IAS 32 and IAS 39Date of transition for some 10. Exemption Share-based paymentsImpact Only apply IFRS 2 to share-based payments issuedafter Nov 2002 and vested / settled by 1 January 2005Insurance contractsComparatives need not be restated for IFRS 4Exploration costsComparatives need not be restated for IFRS 6LeasesAssessment of whether an arrangement contains a lease need not be applied to periods before transition date. 11. Assets held for saleEstimatesExceptions summary to retrospective application Hedge accountingDerecognition of financial assets andliabilities 12. Mandatory exception - Estimates Estimate required by previous GAAP?YESNOMake estimate reflecting conditions at relevant dateEvidence of error?NOYESUse previous estimateYESCalculation consistent with IFRS?NOAdjust previous estimate to reflect IFRS 13. Mandatory exception (IAS -39) 14. Mandatory exception (IFRS-5) 15. ABC Limited presented its financial statements under the national GAAP until 2009. It adopted IFRS from April 1, 2010 and is required to prepare an opening IFRS balance sheet as at April 1, 2010. In preparing the IFRS opening balance sheet of ABC Limited noted: 1.Under its previous GAAP, had classified proposed dividend of Rs.5,00,000 as a current liability. 2. It had not made a provision for warranty of Rs. 200,000 in the financial statements presented under previous GAAP since the concept of constructive obligation was not recognized under its previous GAAP. 3. In arriving at the amount to be capitalized as part of cost necessary to bring an asset to its working condition, XYZ Limited had not included Professional fees of Rs. 300,000 paid to architects at the time when the building it currently occupies as its head office was being constructed. Required: Advise ABC Limited on the treatment of all the above items under IFRS1 16. Solution : For opening IFRS balance sheet at April 1, 2010, ABC Limited would need to make these adjustments to its balance sheet at March 31, 2009, presented under IGAAP: 1. IAS 10 does not allow proposed dividend to be recognized as a liability; but to be disclosed in the Notes . Indian GAAP allowed proposed dividend to be treated as current liability. Therefore proposed dividend of Rs.500,000 should be disclosed in footnotes. 2. IAS 37 requires recognition of a provision for warranty but GAAP did not allow a similar treatment. Thus, a provision for warranty of Rs.200,000 should be recognized under IFRS-37. 3. IAS 16 requires all directly attributable costs of bringing an asset to its working condition for its intended use to be capitalized as part of carrying cost of property, plant and equipment. Thus Rs.300,000 of architects fees should be capitalized as part of Property, plant and equipment and cumulative Depreciation needs to be provided. 17. Q : HL Limited is a first-time adopter under IFRS 1. The most recent financial statements it presented under its previous GAAP were as of December 31, 2011. It has adopted IFRS for the first time and intends to present the first IFRS financial statements as of December 31, 2012. It plans to present two year comparative information for the years 2011 and 2012. The opening IFRS statement of financial position should be prepared as of January 1, 2011 January 1, 2009 January 1, 2010 January 1, 2012 </p>