IFRS 1 First-time Adoption of International Financial Reporting Standards

In 2003, the IASB issued IFRS (IFRS) 1 “First time application of International Financial Reporting Standards”, which replaced the CRP Interpretation (SIC) 8 “Application of IFRS for the first time as the main basis of accounting”. This standard is the first in new edition international standards. It is effective for financial statements for periods beginning on or after January 1, 2004.

The standard was adopted so that companies transitioning to IFRS in the near future could prepare in advance all the necessary data for the formation of opening balance sheets and comparative information so that reporting is fully consistent with IFRS requirements.

The need for a separate standard on the issue of the first application of IFRS is caused by a number of reasons, which include:

• 1) high costs of preparing financial statements in accordance with IFRS for the first time, including employee training, payments to audit companies, obtaining various expert assessments, recalculations;
• 2) an increase in the number of companies moving to IFRS, and the associated requirement for a more detailed explanation of some important issues;
• 3) a requirement that causes additional difficulties retrospective application IFRS. It is often difficult to change accounting estimates retrospectively due to the lack of information available at the date of the financial statements. For especially difficult cases IFRS (IFRS) 1 suggests exceptions to the retrospective application of IFRS requirements to avoid costs outweighing the benefits to users of financial statements. The standard allows six voluntary and three mandatory exceptions to the retrospective application of IFRS requirements;
• 4) coverage of additional requirements but disclosure of information explaining how the transition to IFRS has affected financial position, results financial activities, in the form of a reconciliation of capital and net profit companies;
• 5) the need to form a new accounting policy that meets the requirements of all standards as of the reporting date;
• 6) the need to form an opening balance sheet according to IFRS on the date of transition;
• 7) presentation of comparative data for at least the year preceding the year of the first reporting under IFRS.

First-time IFRS financial statements should provide users with useful information:

• 1) understandable;
• 2) comparable with the information of all periods presented;
• 3) which can serve as a starting point for further preparation of financial statements in accordance with IFRS;
• 4) the cost of compiling which would not exceed the benefits of its value to users of financial statements.

IFRS (IFRS) 1 applies to the first IFRS financial statements and to each interim IFRS financial statements for any period that is part of the year covered by the first IFRS financial statements.

Financial reporting in accordance with IFRS (compliance with IFRS) are financial statements that satisfy all of the accounting and disclosure requirements of each applicable standard and IFRS Interpretation. The fact of compliance with IFRS should be disclosed in such financial statements.

First IFRS financial statements - it is the first annual financial statement to clearly and unequivocally state that it complies with IFRS.

The starting point for preparing IFRS financial statements is the opening IFRS balance sheet prepared as of the date of transition to IFRS. Publication of the opening balance sheet is not required.

Date of transition to IFRS (date of transition to IFRS ) is the beginning of the earliest period for which the company presented full comparative information in accordance with IFRS in its first IFRS financial statements.

At the transition date, an opening IFRS balance sheet is prepared. As a rule, the opening balance sheet is prepared two years before the reporting date of the first IFRS financial statements.

Opening IFRS balance sheet - is the company's balance sheet prepared in accordance with IFRS at the date of transition to IFRS.

Reporting date (balance sheet date, reporting date) - this is the end of the most recent period for which the financial statements are prepared.

Retrospective judgment (hindsight) - it is a judgment about a past event in the light of experience gained since then.

Estimated estimates - These are estimates associated with the uncertainty inherent in the activities of any company. The value of some properties cannot be measured, but can only be calculated based on professional judgment. The use of sound accounting estimates is an important part of preparing financial statements that fairly reflect financial condition, performance and movement Money according to IFRS.

According to IFRS (IFRS) 1 in the first IFRS financial statements:

• 1) Comparative data must be provided for at least one year;
• 2) the accounting policy must comply with the requirements of each applicable IFRS in force at the reporting date of the first financial statements, and be applied to the formation of the opening balance sheet and statements for all comparative periods included in the first IFRS financial statements;
• 3) the date of transition to IFRS, which is also the date of the incoming balance sheet, depends on the number of periods for which comparative information is presented.

By general requirement the date of transition to IFRS is two years from the date of the first reporting under IFRS. So, when switching to IFRS, starting with the financial statements for 2012, the opening balance sheet must be drawn up as of January 1, 2011. For 2011, a complete set of financial statements according to IFRS is presented, but so far without comparative information, and for 2012 d. a complete set of financial statements in accordance with IFRS is formed already with comparative information.

The company should prepare the opening balance sheet as if it were based on the assumption that IFRS financial statements have always been prepared, i.e. retrospectively apply the requirements of all international standards. To this end, the company must:

• 1) recognize assets and liabilities in accordance with IFRS;
• 2) exclude items recognized as assets or liabilities if IFRS does not allow such recognition;
• 3) reclassify items that were recognized in accordance with national accounting rules as one class of assets, liabilities or elements equity, but under IFRS represent another class of assets, liabilities or equity items;
• 4) include in the opening balance sheet all items in the valuation corresponding to IFRS;
• 5) calculate how the result of changes in financial statements prepared in accordance with national standards, after its adjustment to IFRS, will affect the amount of retained earnings or another item of equity.

In the event that the opening balance sheet is formed on January 1, 2012, and the company has existed for 10 years, when reflecting assets and liabilities in the balance sheet, information should be examined starting from the moment of initial recognition of accounting objects. Given that such information is not always available at the date of transition and the cost of its generation may exceed the corresponding economic effect for users of financial statements, in IFRS (IFRS) 1 provided exceptions to retrospective application individual standards when first applying IFRS. As already noted, these are two types of exceptions: voluntary (which the company's management can choose at its discretion) and mandatory (which should be applied regardless of the decision of the company).

Cases of application of exceptions and a summary of the adjustments are presented in Table. 2.3 and 2.4.

Disclosures in the first IFRS financial statements.

Information must be disclosed in full, as required by the relevant IFRS standards, taking into account additional requirements of IFRS (IFRS) 1.

Table 23

The end of the table. 23

Voluntary exception	exception
2. Using fair value as an estimate	The company is not obliged to recreate the original information about the value of property, plant and equipment, intangible assets And investment property, which is a significant simplification. Either the fair value at the date of transition to IFRS or the revalued amount at the latest revaluation is used as the estimated cost for subsequent depreciation and impairment testing of such items. In this case, the conditions must be met that the carrying amount of the object is comparable to its fair value and that the revaluation was carried out by recalculating the actual costs to the price index. This exception applies to any single object
3. Employee benefits	The Company may not restate actuarial gains and losses retrospectively since the inception of the pension plan. They can be calculated prospectively: from the date of transition to IFRS and beyond. Recognition of actuarial gains and losses using the described IAS (IAS) 19 of the "corridor method" may be deferred until the next reporting period. If a company uses this exception, then it applies to all pension plans
4. Cumulative currency translation adjustment	The Company may not recalculate exchange differences retrospectively from the date of formation or acquisition subsidiary. They can be calculated prospectively. All cumulative gains and losses from currency translation are accepted zero. If a company uses this exception, then it applies to all subsidiaries
5. Combined financial instruments	Compound financial instruments should be analyzed in terms of separating their debt and equity components at the time such instruments were created. Entities are not required to identify the equity elements of a compound financial instrument if the debt component is already settled at the date of transition to IFRSs
6. Assets and liabilities of subsidiaries, associates and joint ventures	Dates of transition to IFRS may be different for the parent, subsidiary, associated companies. The exception allows a subsidiary to measure assets and liabilities either at the carrying amount included in the parent's consolidated financial statements or on the basis of IFRS. (IFRS) 1 at the date of transition to IFRS. The carrying amount of the assets and liabilities of the subsidiary must be adjusted to eliminate the adjustments made to it on consolidation under the purchase method.

application of IFRS

Table 2.4

Mandatory exception
1. Derecognition of financial assets and liabilities	As required by IAS (IAS) 39 The requirement to derecognise financial assets and liabilities applies from 1 January 2001. Therefore, financial assets and liabilities derecognised before 1 January 2001 are not recognized in the first IFRS financial statements.
2. Hedge accounting	Hedge accounting should not be applied retrospectively and reflected in the opening IFRS balance sheet and for any transaction in the first IFRS financial statements. Hedge accounting can be introduced from the date of transition to IFRS, prospectively in relation to those transactions that meet the conditions for its application provided for in IFRS (IAS) 39. Supporting documentation also cannot be created retrospectively.
3. Estimates	The use of hindsight to re-evaluate estimates is prohibited. Estimates made by the company in accordance with previously used national rules can only be revised to correct errors that are confirmed to be true or due to a change in accounting policy.

IFRS (IFRS) 1 requires disclosure of information about the impact of the transition to IFRS.

The first IFRS financial statements must include a reconciliation of the following:

• - capital under previously used national rules and capital at the date of transition to IFRS and at the end of the most recent period presented in the company's most recent financial statements under national rules;
• - Net profit under previously used national rules and net profit under IFRS for the most recent period, reflected in the company's most recent financial statements under national rules.

The reconciliation should contain sufficient information for users of the financial statements to understand:

• 1) significant adjustments to articles balance sheet and income statement;
• 2) adjustments due to changes in accounting policies;
• 3) corrections of errors identified during the transition to IFRS.

Disclosure under IAS (IAS) 36 is given when

impairment losses are reflected in the opening IFRS balance sheet.

The total fair value and the total adjustment to the previously used carrying amount are disclosed line by line. The first IFRS financial statements must also include comparative information prepared in accordance with IFRS for at least one year. In Russia, there is no standard regulating the first application of national accounting standards - PBU.

IFRS 1

International Financial Reporting Standard (IFRS) 1
First application of International Financial Reporting Standards

Target

1 The objective of this IFRS ( IFRS ) - ensure thatthe first financial statements of the enterprise under IFRS ( IFRS ) and its interim financial statements for part of the period covered by those financial statements contained high quality information that:

(a) is transparent to users and comparable to all other periods presented;

(b ) provides an acceptable starting point for accounting according toInternational Financial Reporting Standards ( IFRS ) ; And

(c) the costs of preparing it do not exceed the benefits to users.

Scope of application

2 An entity shall apply this IFRS ( IFRS):

(a ) in the first IFRS financial statements ( IFRS); And

(b ) in any interim financial statements, if any, presented in accordance with IFRS ( IAS) 34 "Interim Financial Reporting" for the portion of the period covered by the first IFRS financial statements ( IFRS).

3 The company's first IFRS financial statements ( IFRS ) is the first annual financial statement in which an entity adopts International Financial Reporting Standards ( IFRS ), expressly and unconditionally declaring in such financial statements that they comply with IFRS ( IFRS ). IFRS financial statements ( IFRS ) is the entity's first IFRS financial statements ( IFRS ), if, for example, an enterprise:

(a) presented financial statements for the most recent prior period:

(i ) in accordance with national requirements that comply with International Financial Reporting Standards ( IFRS ) not in all respects;

(ii ) in accordance with International Financial Reporting Standards ( IFRS ) in all respects other than the fact that the financial statements did not contain an express and unconditional statement that they were in accordance with International Financial Reporting Standards ( IFRS);

(iii ) containing a clear and unconditional statement that it complies with some, but not all, IFRSs ( IFRS);

(iv ) in accordance with national requirements that do not comply with International Financial Reporting Standards ( IFRS ) using some selected IFRS ( IFRS ) to account for items for which there were no national requirements; or

(v ) in accordance with national requirements, including a reconciliation of certain amounts with amounts determined in accordance with International Financial Reporting Standards ( IFRS);

(b ) has prepared financial statements in accordance with International Financial Reporting Standards ( IFRS ) for internal use only, without making it available to the owners of the enterprise or any other external users;

(c ) has prepared a package of statements in accordance with International Financial Reporting Standards ( IFRS ) for the purposes of consolidation without preparing a complete set of financial statements as defined in IFRS ( IAS) 1 "Presentation of Financial Statements" (as amended in 2007); or

(d) did not present financial statements for previous periods.

4 This IFRS Standard ( IFRS ) applies when an entity first applies International Financial Reporting Standards ( IFRS). It does not apply if, for example, an enterprise:

(a ) ceases to present financial statements in accordance with national requirements if it has previously submitted, along with such statements, another set of financial statements containing a clear and unconditional statement of compliance with International Financial Reporting Standards ( IFRS);

(b ) presented the financial statements for the previous year in accordance with national requirements, and these financial statements contained a clear and unconditional statement of compliance with International Financial Reporting Standards ( IFRS); or

(c ) presented the financial statements for the previous year, which contained a clear and unconditional statement of compliance with International Financial Reporting Standards ( IFRS ), even if a qualified auditor's report has been issued on those financial statements.

5 This Standard does not apply to changes in accounting policies made by an entity that already applies International Financial Reporting Standards ( IFRS). Such changes are subject to:

(a ) requirements for changes in accounting policies contained in IFRS ( IAS) 8 "Accounting policies, changes in accounting estimates and mistakes"; And

(b ) special transition requirements contained in other IFRSs ( IFRS).

Recognition and measurement

Elementary IFRS statement of financial position ( IFRS)

The company must prepare and submitopening IFRS statement of financial position ( IFRS ) on date of transition to IFRS ( IFRS ) . This is the starting point for the preparation of an entity's financial statements in accordance with IFRS ( IFRS).

Accounting policy

7 An entity shall use uniform accounting policies when preparing an opening IFRS statement of financial position ( IFRS ) and for all periods presented in its first IFRS financial statements ( IFRS ). This accounting policy must comply with all IFRSs ( IFRS ) in force at the end of the first reporting period for which the entity is reporting under IFRS ( IFRS ) , except as provided in paragraphs 13-19 and applications B-E.

8 An entity shall not apply other versions of IFRSs ( IFRS ) that were previously active. An entity may apply the new IFRS ( IFRS ), which has not yet become mandatory if its early application is permitted.

Example: Consistently applying the latest version IFRS

Initial information The end of the first reporting period for whichEntity A prepares IFRS financial statements on 31 December 20X5 Entity A elects to present comparative information in these financial statements for one year only (see paragraph 21). Therefore, its date of transition to International Financial Reporting Standards (IFRS) is the start of business on 1 January 20X4 (or also close of business on 31 December 20X3). Entity A has presented annual financial statements in accordance with itsprevious GAAP as of December 31 of each year up to and including December 31, 20X4.

Application of requirements Entity A should apply IFRSs for periods ending 31 December 20 X5 y.: (a) in preparing and presenting its opening IFRS statement of financial position as at 1 January 20X4; And (b) in preparing and presenting its statement of financial position as at 31 December 20X5 (including comparative amounts as at 31 December 20X4), statement of comprehensive income, statement of changes in equity and statement of cash flows for the year ended 31 December 20X5 (including 20X4 comparatives) and disclosures (including 20X4 comparatives). If the new IFRS is not yet mandatory, but early adoption is permitted, then entity A is permitted, but not required, to apply that standard in its first IFRS financial statements..

9 The transition conditions in other IFRSs apply to changes in accounting policies made by an entity already applying IFRSs; they are not usedan entity adopting IFRS for the first time , upon transition to IFRS, except as specified in Appendices B-E.

10 Except as described in paragraphs 13–19 and appendices B–E, an entity shall, in its opening IFRS statement of financial position:

(a) recognize all assets and liabilities required by IFRS;

(b) not recognize items as assets or liabilities if IFRSs do not permit such recognition;

(c) reclassify items that the entity recognized under previous GAAP as one class of asset, liability, or component of equity, but which are a different class of asset, liability, or component of equity in accordance with International Financial Reporting Standards (IFRS); And

(d) apply IFRS when measuring all recognized assets and liabilities.

11 The accounting policies used by an entity in preparing an opening IFRS statement of financial position may be different from the accounting policies applied at the same date under previous GAAP. Therefore, the adjustments arise as a result of events and transactions that occurred before the date of transition to International Financial Reporting Standards (IFRS). Therefore, the entity must recognize these adjustments directly in retained earnings (or, if appropriate, in another category of equity) at the date of transition to IFRSs.

12 This IFRS establishes two categories of exceptions to the principle that an opening IFRS statement of financial position must conform to each IFRS:

(a) paragraphs 14–17 and Appendix B prohibit the retrospective application of certain aspects of other IFRSs;

(b) Applications C-E is exempt from some of the requirements of other IFRSs.

Exceptions for retrospective application in other IFRSs ( IFRS)

13 This IFRS ( IFRS ) prohibits the retrospective application of certain aspects of other IFRSs. These exceptions are set out in paragraphs 14-17 and Appendix B.

Estimated estimates

14 An entity's estimates under International Financial Reporting Standards (IFRS) at the date of transition to IFRS should be consistent with estimates made at the same date under previous GAAP (after adjustments to reflect differences in accounting policies) unless there is objective evidence that such estimates were erroneous.

15 An entity may obtain information after the date of transition to IFRSs ( IFRS ) the estimates it has made under previous GAAP. Paragraph 14 requires an entity to account for receipt of this information in the same way as non-adjusting events after the reporting period in accordance with IFRSs ( IAS) 10 "Events after the end of the reporting period" . For example, suppose that the date of transition of an enterprise to IFRS ( IFRS ) - January 1, 20X4, and new information as of July 15, 20X4 requires a revision of the estimate made under previous GAAP at December 31, 20X3. An entity need not reflect this new information in its opening IFRS statement of financial position ( IFRS ) (unless the estimates need to be adjusted for differences in accounting policies or there is objective evidence that the estimates were in error.)Instead, the entity must reflect this new information in its income statement (or, if appropriate, as other comprehensive income) for the year ending 31 December 20X4.

16 An entity may need to make estimates in accordance with IFRSs ( IFRS ) at the date of transition to IFRS ( IFRS ) that were not required at that date under previous GAAP. To achieve compliance with IFRS ( IAS ) 10 these estimates in accordance with International Financial Reporting Standards ( IFRS ) should reflect conditions that existed at the date of transition to International Financial Reporting Standards ( IFRS ). In particular, at the date of transition to IFRS ( IFRS ) estimated estimates of market prices, interest rates or exchange rates foreign currencies should reflect market conditions for this date.

17 Paragraphs 14–16 apply to the opening IFRS statement of financial position ( IFRS ). They also apply to the comparative period presented in the entity's first IFRS financial statements ( IFRS ); in this case, references to the date of transition to IFRS ( IFRS ) are replaced by references to the end of that comparative period.

Exemption from the requirements of other IFRSs

18 An enterprise may choose to use one or more of the exemptions contained in Annexes C to E. An entity need not apply these exceptions in the same way as other articles.

19 Some exceptions to those provided in Annexes C-E refer tofair value . When determining fair value in accordance with this IFRS ) an entity shall apply the definition of fair value in Appendix A, as well as any more specific guidance provided in other IFRSs ( IFRS ), by determining the fair value of the asset or liability in question. Such fair value should reflect conditions that existed at the date the fair value was determined.

Presentation and disclosure

20 N This IFRS does not provide for exceptions to the presentation and disclosure requirements in other IFRSs.

Comparative Information

21 To comply with IAS 1, an entity's first IFRS financial statements must include at least three statements of financial position, two statements of comprehensive income (if any), two statements of cash flows , two statements of changes in equity, and related notes, including comparative information.

Comparative information that does not meet the requirements of IFRS ( IFRS ) and summaries of data for previous years

22 Some entities present summaries of selected data for periods prior to the first period for which they present full comparative information in accordance with IFRS ( IFRS ). This International Standard does not require that such extracts comply with the requirements IFRS ) by recognition and measurement. Moreover, some entities present comparative information under previous GAAP in the same way as the comparative information required by IFRS ( IAS 1. For any financial statements containing extracts or comparative information under previous GAAP, an entity shall:

(a) clearly distinguish information presented under previous GAAP as not prepared in accordance with International Financial Reporting Standards (IFRS); And

(b) disclose the nature of the major adjustments that would make it compliant with International Financial Reporting Standards (IFRS). An entity does not need to quantify such adjustments.

Explanations for the transition to International Financial Reporting Standards (IFRS)

23 An entity must explain how the transition from previous GAAP to IFRSs has affected its financial position, financial performance and cash flows.

Checks

24 To comply with paragraph 23, an entity's first IFRS financial statements must include:

(a) reconciliations of equity reported under previous GAAP to IFRS equity on both of the following dates:

(i ) date of transition to IFRS ( IFRS); And

(ii) the end date of the most recent period presented in the entity's most recent annual financial statements under previous GAAP;

(b ) reconciliation of total comprehensive income for IFRS for the most recent period of the entity's most recent annual financial statements. The starting point for such a reconciliation should be total comprehensive income under previous GAAP for the same period or, if the entity did not report that figure, profit or loss under previous GAAP;

(c ) if the entity first recognized or reversed any impairment loss when preparing its opening IFRS statement of financial position ( IFRS ), the disclosures that would be required under IFRS ( IAS) 36 "Impairment of Assets" if the entity recognized those impairment losses or reversals for them in the period beginning on the date of its transition to International Financial Reporting Standards ( IFRS).

25 The reconciliations required by paragraphs 24(a) and ( b ) should be detailed enough to enable users to understand significant adjustments to the statement of financial position and statement of comprehensive income. If an entity presented a cash flow statement in accordance with previous GAAP, the entity must also explain material adjustments in the cash flow statement.

26 If an entity becomes aware of errors made in previous GAAP in the reconciliations required by paragraphs 24(a) and ( b ), a distinction must be made between the adjustment of such errors and changes in accounting policies.

27 IAS 8 does not apply to changes in accounting policies that an entity makes when applying IFRSs or changes in policy after an entity presents its first financial statements prepared in accordance with IFRSs. Therefore, the requirements of IAS 8 relating to changes in accounting policies do not apply to an entity's first financial statements prepared in accordance with IFRS.

27A If an entity, during the period covered by its first IFRS financial statements, changes its accounting policies or uses the exceptions in this Standard, it shall explain the changes between its first IFRS interim financial report and its first financial statement. IFRS statements in accordance with paragraph 23, and update the reconciliation required in accordance with paragraphs 24(a) and (b).

28 If an entity has not presented financial statements for previous periods, then this fact must be disclosed in its financial statements prepared for the first time in accordance with IFRS ( IFRS).

Definition of financial assets or financial liabilities

29 An entity may designate a previously recognized financial asset as a financial asset measured at fair value through profit or loss in accordance with paragraph D19A.An entity shall disclose the fair value of financial assets so designated at the classification date and their classification and carrying amount in previous financial statements.

29 A An entity may designate a previously recognized financial liability as a financial liability at fair value through profit or loss in accordance with paragraph D19.An entity shall disclose the fair value of the financial liability so designated at the classification date and their classification and carrying amount in previous financial statements.

Use of fair value as deemed cost

30 If an entity uses fair value in its opening IFRS statement of financial position asnotional cost for an item of property, plant and equipment, investment property or an intangible asset (see paragraphs D5 and D7), the entity's first-time IFRS financial statements must disclose for each line item in the opening IFRS statement of financial position:

(a) the sum of those fair values; And

(b) the amount of adjustments to carrying amounts reported in accordance with previous GAAP.

Use of deemed cost of investments in subsidiaries, jointly controlled entities and associates

31 Similarly, if an entity uses deemed cost in its opening IFRS statement of financial position to account for investments in subsidiaries, jointly controlled entities and associates in its separate financial statements (see paragraph D15), then the first separate financial statement An entity's IFRS financial statements must disclose the following information:

(A)the total notional cost of those investments for which the notional cost is their carrying amount under previous GAAP;

(b) the total deemed cost of those investments for which the deemed cost is their fair value; And

(c) cumulative fair value adjustments under previous GAAP.

Usage notional cost of oil and gas assets

31A If an entity uses the exemption disclosed in paragraph D 8 A (b ) for all oil and gas assets, it must disclose that fact and the basis on which previous GAAP carrying amounts were allocated.

Use of notional historical cost for transactions subject to tariff regulation

31B If an entity uses the exemption in paragraph D8B for rate-regulated transactions, it shall disclose that fact and the basis used to determine the carrying amount in accordance with previous GAAP.

Use of notional historical cost after severe hyperinflation

31C If an entity elects to measure assets and liabilities at fair value and use that fair value as deemed cost in its opening IFRS statement of financial position as a result of severe hyperinflation (see paragraphs D26-D 30), the entity's first IFRS financial statements must disclose an explanation of how and why the entity used and then ceased to use a functional currency that has both of the following characteristics::

a reliable general price index is not available for all businesses with foreign currency transactions and balances.

lack of fungibility between the currency and a relatively stable foreign currency.

Interim Financial Statements

32 To comply with paragraph 23, when presenting interim financial statements in accordance with IFRSs ( IAS ) 34 for the portion of the period covered by the first IFRS financial statements ( IFRS ), an entity must meet the following requirements in addition to the requirements of IFRS ( IAS) 34:

(a) each interim financial statement must, if an entity presented such for the comparable interim period of the immediately preceding financial year, include:

(i ) prior GAAP equity reconciliations at the end of that comparable interim period with IFRS equity ( IFRS) on that date; And

(ii ) a reconciliation of its total comprehensive income under IFRS ( IAS ) for that comparable interim period (current and year-to-date). The starting point for this reconciliation is total comprehensive income under previous GAAP for that period or, if an entity does not present such a figure, profit or loss under previous GAAP.

(b ) in addition to the reconciliations required in paragraph (a), the entity's first interim financial statements prepared in accordance with IFRSs ( IAS ) 34, for part of the period covered by the first IFRS financial statements ( IFRS ), shall include the reconciliations described in paragraph 24(a) and ( b ) (supplemented with the details required in paragraphs 25 and 26), or a cross-reference to another published document that includes these reconciliations.

(c) If an entity changes its accounting policies and uses the exceptions in this Standard, it shall explain the changes in each such interim financial statement in accordance with paragraph 23 and update the reconciliations required by paragraphs (a) and (b) .

33 In IFRS (IAS ) 34 requires a minimum of disclosures, which is based on the assumption that users of interim financial statements also have access to the most recent annual financial statements. However, in IFRS IAS ) 34 also requires an entity to disclose “any events or transactions that are material to an understanding of the current interim period”. Thus, if IFRS ) did not disclose information material to an understanding of the current interim period in its most recent annual financial statements prepared in accordance with previous GAAP, its interim financial statements must disclose that information or include a cross-reference to another published document that includes it.

Effective Date

34 An entity shall apply this IFRS ( IFRS ), if the entity's first-time financial statements prepared in accordance with IFRS ( IFRS ) is compiled for the period beginning on or after July 1, 2009. The application of the standard for earlier periods is permitted.

35 An entity shall apply the amendments in paragraphs D1(n) and D23 for annual periods beginning on or after 1 July 2009. If an entity applies IFRS ( IAS) 23 "Borrowing costs" (as amended in 2007) for an earlier period, the amendments shall apply for that earlier period.

36 IFRS 3 "Business Combinations" (as amended in 2008) amended paragraphs 19, C1 and C4(f) and (g). If an entity applies IFRS ( IFRS ) 3 (as amended in 2008) to an earlier period, then these amendments should be applied to such earlier period.

37 IAS 27 "Consolidated and Separate Financial Statements" (as revised in 2008) amended paragraphs 13 and B7. If an entity applies IFRS ( IAS

38 Cost of investment in a subsidiary, jointly controlled entity or associate (Amendments to IFRS ( IFRS) 1 and IFRS (IAS ) 27) supplemented paragraphs 31, D1(g), D14 and D15. An entity shall apply these paragraphs for annual periods beginning on or after July 1, 2009. Early application is permitted. If an entity applies those paragraphs for an earlier period, the entity shall disclose that fact.

39 Publication "Improvements in IFRS" , released in May 2008 amended paragraph B7. An entity shall apply these amendments for annual periods beginning on or after July 1, 2009. If an entity applies IFRS ( IAS ) 27 (as amended in 2008) to an earlier period, the said amendments shall apply to such earlier period.

39 A B amendment to IFRS 1 "D Additional exemptions for first-time adopters of IFRS , released in July 2009, items were added 31 A , D 8 A , D 9 A and D 21 A and amended paragraph D 1(c ), (d ) and (l ). An entity shall apply these amendments for annual periods beginning on 1 January 2010 on or after this date. Early application is allowed. If an entity applies those amendments for an earlier period, it shall disclose that fact.

39B [Deleted]

39C IFRIC 19Redemption of financial liabilities with equity instruments ”added item D25. The company must apply this amendment when applying IFRIC Interpretation 19

39D B amendment to IFRS 1 « Limited exemption from comparative disclosures under IFRS 7 for first-time adopters of IFRS ”, issued in January 2010, paragraph E3 was added. An entity shall apply this amendment for annual periods beginning on or after 1 July 2010. Early application is permitted. If an entity applies the amendment for an earlier period, the entity shall disclose that fact

39E Publication " Improvements in IFRS ”, issued in May 2010, added paragraphs 27A, 31B and D8B and amended paragraphs 27, 32, D1(c) and D8. An entity shall apply those amendments for accounting periods beginning on or after 1 January 2011. Early application is permitted. If an entity applies the amendments for an earlier period, it shall disclose that fact. Entities that have applied IFRSs for periods prior to the effective date of IFRS 1 or have applied IFRS 1 in a previous period are permitted to apply the amendment to paragraph D8 retrospectively in the first reporting year that the amendment becomes effective. An entity applying paragraph D8 retrospectively shall disclose that fact.

39F B amendment to IFRS 7" Disclosure - transfer of financial assets ”, issued in October 2010, added item E4. An entity shall apply the amendment for annual periods beginning on or after 1 July 2011. Early application is allowed. If an entity early adopts the amendment, it shall disclose that fact.

39G Through IFRS 9Financial instruments ”, issued in October 2010, amended paragraphs 29, B1-B5, D1(j), D14, D15, D19 and D20, added paragraphs 29A, B8, B9, D19A-D19D, E1 and E2, and deleted paragraph 39B. An entity shall apply these amendments when it applies IFRS 9 as issued in October 2010.

39H In paragraphs B2, D1 and D20 of the publication "Severe hyperinflation and elimination of fixed dates for first-time IFRS entities ” (IFRS Amendments) issued in December 2010, amended and added paragraphs 31C and D26-D30. An entity shall apply these amendments for annual periods beginning on or after 1 July 2011. Early application is allowed.

Repeal of IFRS 1 (issued in 2003)

40 This IFRS replaces IFRS 1 (issued in 2003 and amended in May 2008).

Annex A

Definition of terms

IFRS).

date of transition to International Financial Reporting Standards (IFRS)	The beginning of the earliest period for which an entity presents full comparative information in accordance with International Financial Reporting Standards (IFRS) in its firstfinancial statements under IFRS.
International Financial Reporting Standards (IFRS)	Standards and clarifications,issued by the International Financial Reporting Standards Board (IASB). They consist of: (a) International Financial Reporting Standards ( IFRS); (b) International Financial Reporting Standards ( IAS); (c) IFRS clarifications ( IFRIC); And (d) RCC clarifications ( SIC).
opening statement of financial position under IFRS	Statement of financial position of the enterpriseat the date of transition to IFRS ( IFRS ).
first IFRS financial statements	The first annual financial statements in which an entity appliesInternational Financial Reporting Standards ( IFRS ) according to a clear and unconditional statement of compliance with International Financial Reporting Standards ( IFRS).
first reporting period according to IFRS	Latest reporting period coveredthe company's first IFRS financial statements ( IFRS ) .
first-time adopter of IFRS	The company representing itsfirst financial statements under IFRS ( IFRS ).
previous GAAP (Generally Accepted Accounting Principles)	Accounting methods usedan entity adopting IFRS for the first time, immediately prior to the application of IFRS.
fair value	The amount for which an asset could be exchanged or a liability settled in a transaction between knowledgeable, willing, unrelated parties.
notional cost	The amount used as a substitute for cost, or amortized cost, at a given date. Subsequent depreciation or amortization assumes that the entity initially recognized the asset or liability at that date and its cost was equal to its deemed cost.

Annex B

Exceptions retrospective application in other IFRSs ( IFRS)

This appendix is ​​an integral part of this IFRS ( IFRS ).

IN 1 An entity must apply the following exemptions:

(a) derecognition of financial assets and financial liabilities (paragraphs B2 and B3);

(b) hedge accounting (paragraphs B4-B6);

(c ) minority share(paragraph B7);

(d ) classification and measurement of financial assets(paragraph B8); And

(e) embedded derivatives (paragraph B9).

Derecognition of financial assets and financial liabilities

B2 Except as permitted in paragraph B3, an entity applying IFRSs for the first time shall apply prospectively the derecognition requirements in IFRSs RS) 9" Financial instruments ”, to transactions made on or after January 1, 2004. In other words, if a first-time adopter of IFRSs derecognises financial assets or financial liabilities that are not derivatives under its previous GAAP as a result of a transaction before 1 January 2004, then it shall derecognise those assets and liabilities under IFRS (unless they qualify for recognition as a result of a later transaction or event).

B3 Notwithstanding the provisions of paragraph B2, an entity may apply the derecognition requirements in IFRS 9 retrospectively from the date the entity makes that election, provided that the information necessary to apply IFRS 9 to financial assets and financial liabilities derecognised as a result of past transactions has been received at the time those transactions are initially recorded.

hedge accounting

B4 IFRS 9 requires an entity at the date of transition to IFRSs to:

(a) measure all derivatives at fair value; And

(b) Eliminate all deferred gains and losses arising from derivatives that were reported under previous GAAP as assets or liabilities.

B5 An entity shall not designate in its opening IFRS statement of financial position a hedging relationship that does not qualify for hedge accounting in IAS 39 (for example, many hedging relationships where the hedging instrument is monetary instrument or an issued option; or where the hedged item is a net position). However, if an entity designated a net position as a hedged item under previous GAAP, it may designate an individual item within that net position as a hedged item under IFRSs, provided it does so no later than the date of transition to IFRSs ( IFRS).

AT 6 If prior to the date of transition to IFRS an entity designated a transaction as a hedge but that hedge does not satisfy the conditions for hedge accounting in IAS 39, the entity shall apply paragraphs 91 and 101 of IAS 39 to discontinue hedge accounting . Transactions initiated prior to the date of transition to IFRS should not be retrospectively designated as hedges.

Minority share

B7 An enterprise that first usesIFRS shall apply the following requirements of IAS 27 (as amended in 2008) prospectively from the date of transition to IFRS:

(a) the requirement in paragraph 28 that total comprehensive income is attributable to the owners of the parent and to the minority interest, even if this results in a negative minority interest balance;

(b) the requirements in paragraphs 30 and 31 to account for changes in a parent's interest in a subsidiary that do not result in a loss of control; And

(c) the requirements in paragraphs 34–37 to account for the loss of control of a subsidiary and the corresponding requirements in paragraph 8A of IFRS 5"Long-term assets held for sale and discontinued operations".

However, if an entity applying IFRS for the first timedecides to apply IFRS 3 (as revised in 2008) retrospectively to a business combination, it shall apply IAS 27 (as revised in 2008) in accordance with paragraph C1 of this IFRS.

Classification and valuation of financial assets

B8 An entity shall assess whether a financial asset meets the conditions in paragraph 4.1.2 of IFRS 9 based on the facts and circumstances that exist at the date of transition to IFRSs.

Embedded derivatives

B9 An entity applying IFRSs for the first time shall assess whether it is necessary to separate an embedded derivative from its host contract and account for it as a derivative based on conditions that existed at the later of the following dates: party to that contract, and the date on which the revaluation was required in accordance with paragraph B4.3.11 of IFRS 9.

Annex C
Business combinations

This appendix is ​​an integral part of this IFRS ( IFRS ). An entity shall apply the following requirements to business combinations recognized by the entity prior to the date of transition to IFRSs ( IFRS).

WITH 1 First-time adopter of IFRS ( IFRS ), may decide not to apply IFRS ( IFRS ) 3 (as amended in 2008) retrospectively to past business combinations (business combinations that occurred prior to the date of transition to International Financial Reporting Standards ( IFRS )). However, if an entity applying IFRS for the first time ( IFRS ), restates the data for a business combination to comply with IFRS ( IFRS ) 3 (as amended in 2008), it must recalculate all subsequent business combinations and apply IFRS ( IAS ) 27 (as amended in 2008) from the same date. For example, if an entity applying IFRS for the first time ( IFRS ) decides to restate data for a business combination that occurred on 30 June 20X6, it must restate all business combinations that occurred between 30 June 20X6 and the date of transition to IFRSs ( IFRS ), as well as apply IFRS ( IAS ) 27 (as amended in 2008) from 30 June 20X6

C2 An entity is not required to apply IFRS IAS) 21 “The impact of changes in foreign exchange rates » retrospectively to fair value adjustments and goodwill arising from business combinations that occurred before the date of transition to IFRSs ( IFRS ). If an entity does not apply IFRS ( IAS ) retrospectively 21 to such fair value adjustments and goodwill, it shall account for them as assets and liabilities of the entity and not as assets and liabilities of the acquiree. WITHtherefore, these goodwill and fair value adjustments are either already denominated in the entity's functional currency or are non-monetary foreign currency items reported using the exchange rate applied in accordance with previous GAAP.

C3 An entity may apply IFRS IAS ) 21 retrospectively to fair value and goodwill adjustments arising from:

(a ) or for all business combinations that occurred prior to the date of transition to International Financial Reporting Standards ( IFRS); or

(b ) for all business combinations that an entity elects to restate to comply with IFRSs ( IFRS ) 3 as permitted by paragraph C1 above.

C4 If an entity applying IFRS for the first time ( IFRS ), does not apply IFRS ( IFRS ) 3 retrospectively to a past business combination, this will have the following effects on that business combination:

(a IFRS ) must be classified in the same way as in previous GAAP financial statements (acquisition by a formal acquirer, reacquisition by a formal acquirer, or pooling of interests);

(b ) an entity applying IFRS for the first time ( IFRS ), must recognize at the date of transition to IFRS ( IFRS ) all of its assets and liabilities acquired or acquired in a past business combination other than:

(i) certain financial assets and financial liabilities that were derecognised under previous GAAP (see paragraph B2); And

(ii ) assets, including goodwill, and liabilities that were not recognized in the acquirer's consolidated statement of financial position under previous GAAP and would not meet the recognition criteria under International Financial Reporting Standards ( IFRS ) in the acquiree's separate statement of financial position (see paragraphs (f)-(i) below).

An entity that applies IFRS for the first time ( IFRS ) must recognize all the resulting changes through an adjustment to retained earnings (or another category of equity, if appropriate), unless the change results from the recognition of an intangible asset not previously separated from goodwill (see paragraph ( g )(i )).

(c ) an entity applying IFRS for the first time(IFRS ), must exclude from its opening IFRS statement of financial position ( IFRS ) any item recognized under previous GAAP that does not qualify for recognition as an asset or liability under IFRSs ( IFRS ). An entity that applies IFRS for the first time ( IFRS ), must take into account the resulting change as follows:

(i) an entity applying IFRS for the first time (IFRS) could have classified a past business combination as an acquisition and recognized as an intangible asset in accordance with IFRS (IAS) 38 "Intangible assets" an item that does not meet the criteria for recognition as an asset.It must reclassify that item (and, if any, the related deferred tax and minority interest) as part of goodwill (unless it deducted goodwill directly from equity in accordance with previous GAAP, see paragraphs (g)(i) and (i) below );

(ii)an entity applying IFRS for the first time must recognize all other resulting changes in retained earnings.

(d)IFRS requires that certain assets and liabilities be subsequently measured on a basis other than cost, such as fair value. An entity applying IFRS for the first time must measure those assets and liabilities on that basis in its opening IFRS statement of financial position, even if they were acquired or received in a business combination in the past. It should recognize any resulting change in carrying amount by adjusting retained earnings (or another category of equity, if appropriate) rather than goodwill.

(e) immediately after the business combination, the carrying amount of the assets acquired and liabilities assumed in that business combination under previous GAAP would be their deemed cost at that date in accordance with IFRS (IFRS). If IFRS (IFRS) subsequently require that those assets and liabilities be measured at cost, then that notional cost will be the basis for cost-based depreciation of property, plant and equipment or intangible assets from the date of the business combination.

(f) if the acquired asset or commitment made in a business combination in the past were not recognized under previous GAAP, their notional cost need not be zero in the opening IFRS statement of financial position (IFRS). Instead, the acquirer must recognize and measure them in its consolidated statement of financial position on a basis that IFRS (IFRS) would have been required upon recognition in the acquiree's statement of financial position.To illustrate:if, in accordance with previous GAAP, the acquirer did not capitalize a finance lease acquired in a past business combination, it shall capitalize that lease in its consolidated financial statements in accordance with IFRS (IAS) 17 "Rent" would require the acquiree to make in its IFRS statement of financial position (IFRS). Similarly, if, in accordance with previous GAAP, the acquirer did not recognize a contingent liability that still exists at the date of transition to IFRSs (IFRS), the acquirer shall recognize that contingent liability at that date, unless IFRS (IAS) 37 "Estimated reserves, contingent liabilities and contingent assets" would prohibit its recognition in the financial statements of the acquirer. Conversely, if the asset or liability had not been separated from goodwill in accordance with previous GAAP but would have been recognized separately in accordance with IFRS (IFRS) 3, then the asset or liability will remain in goodwill if IFRS (IFRS) do not require their recognition in the financial statements of the acquiree;

(g) the carrying amount of goodwill in the opening IFRS statement of financial position (IFRS) will be its carrying amount under previous GAAP at the date of transition to IFRSs (IFRS) after the following two corrections:

(i) if the requirement of the above paragraph applies (c)(i), then an entity applying IFRS for the first time (IFRS) should increase the carrying amount of goodwill on reclassification of an item it recognized as an intangible asset in accordance with previous GAAP. Similarly, if item (f) above is required for a first-time adopter of IFRSs (IFRS), to recognize an intangible asset that was not separated from the recognized goodwill in accordance with previous GAAP, the first-time adopter of IFRSs (IFRS) should reduce the carrying amount of goodwill accordingly (and, if applicable, adjust deferred tax and non-controlling interest);

(ii) whether or not there is any indication that goodwill may be impaired, an entity first-time adopter of IFRSs (IFRS), must apply IFRS (IAS) 36 to test goodwill for impairment at the date of transition to IFRS (IFRS) and recognizing the resulting impairment loss in retained earnings (or, if IFRS (IAS) 36 requires - in the increase in the value of property from revaluation). The impairment test should be based on conditions existing at the date of transition to IFRSs (IFRS);

(h) no other adjustments to the carrying amount of goodwill at the date of transition to IFRSs (IFRS) should not be produced. For example, an entity adopting IFRS for the first time (IFRS), shall not restate the carrying amount of goodwill:

(i) to eliminate research and development in progress acquired in that business combination (unless the related intangible asset is recognized in accordance with IFRS (IAS) 38 in the statement of financial position of the acquiree);

(ii) to adjust the previous amortization of goodwill;

(iii) to eliminate adjustments to goodwill that are not permitted under IFRS ( IFRS ) 3 but were made in accordance with previous GAAP due to adjustments to assets and liabilities between the date of the business combination and the date of transition to International Financial Reporting Standards (IFRS).

(i) if an entity applying IFRS for the first time (IFRS), recognized goodwill under previous GAAP as a deduction from equity:

(i) it shall not recognize such goodwill in its opening IFRS statement of financial position (IFRS). In addition, it must not reclassify that goodwill to profit or loss if it sells a subsidiary or the investment in that subsidiary is impaired;

(ii) adjustments resulting from the subsequent resolution of a business contingency affecting the acquisition cost should be recognized in retained earnings;

(j) under previous GAAP, an entity first-time adopter of IFRSs (IFRS) may not have a consolidated subsidiary acquired in a past business combination (for example, the parent did not treat it as a subsidiary under previous GAAP or did not prepare consolidated financial statements). An entity that applies IFRS for the first time (IFRS) shall adjust the carrying amounts of the assets and liabilities of the subsidiary to amounts that IFRS (IFRS) would be required in the statement of financial position of a subsidiary. The notional cost of goodwill is equal to the difference existing at the date of transition to International Financial Reporting Standards (IFRS):

(i) between the parent company's interest in these adjusted carrying amounts; And

(ii) the cost of the investment in the subsidiary in the separate financial statements of the parent;

(k) the measurement of non-controlling interest and deferred tax results from the measurement of other assets and liabilities. Therefore, such adjustments to recognized assets and liabilities affect non-controlling interests and deferred tax.

C5The past business combination exemption also applies to past acquisitions of investments in associates and interests in joint ventures.Moreover, the date referred to in paragraph C1 applies equally to all acquisitions.

ApplicationD
Exemptions from other IFRSs

This appendix is ​​an integral part of this IFRS ( IFRS ).

D1 An entity may elect to use one or more of the following exemptions:

(a) share-based payment transactions (paragraphs D2 and D3);

(b) insurance contracts (Item D4);

(c) fair value or revaluation as deemed cost (pointsD5- D8 B );

(d) lease (points D9 and D 9 A );

(e) employee benefits (itemsD10 andD11);

(f) accumulated differences when translated into another currency (pointsD12 and D13);

(g) investments in subsidiaries, jointly controlled entities and associates (paragraphs D14 and D15);

(h) assets and liabilities of subsidiaries, associates and joint ventures (paragraphsD16 and D17);

(i) combined financial instruments (itemD18);

(j) definition of previously recognized financial instruments (paragraphsD19- D 19 D );

(k) measurement at the fair value of financial assets or financial liabilities at initial recognition (paragraph D20);

(l) decommissioning obligations included in the cost of property, plant and equipment (paragraphs D21 and D 21 A );

(m) financial assets and intangible assets accounted for in accordance with IFRIC 12"Concession agreements for the provision of services" (paragraph D22);

(n) borrowing costs (paragraph D23);

(o) transfer of assets from customers (paragraph D24);

(p) cancellation of financial liabilities with equity instruments (paragraph D25);

(q) severe hyperinflation (paragraphs D26–D30).

An entity shall not apply these exemptions by analogy to other items.

Share-based payment transactions

D2 It is encouraged, but not required, for a first-time adopter of IFRSs (IFRS), applied IFRS (IFRS) 2 "Share Based Payment" to equity instruments granted on or before November 7, 2002. It is also encouraged, but not required, that an entity applying IFRS for the first time (IFRS), to equity instruments that were granted after November 7, 2002 and vested before the later of the following dates:(a) the date of transition to IFRSs; and (b) 1 January 2005.However, if an entity applying IFRS for the first time (IFRS), decides to apply IFRS (IFRS) 2 to such equity instruments, it may do so only if it has already disclosed to the public the fair value of those equity instruments, determined at the measurement date, as defined in IFRS (IFRS) 2. For all grants of equity instruments to which IFRS 2 has not been applied (for example, equity instruments granted on or before November 7, 2002), an entity applying IFRS for the first time must still disclose the information required by paragraphs 44 and 45 of IFRS 2. If a first-time adopter of IFRSs changes the terms or conditions for granting equity instruments to which IFRS 2 has not been applied, then the entity is not required to apply paragraphs 26–29 of IFRSs (IFRS) 2 if the change happened beforedate of transition to IFRS.

D3It is encouraged, but not required, that an entity applying IFRS for the first time (IFRS), applied IFRS (IFRS) 2 to liabilities arising from share-based payment transactions that were settled prior to the date of transition toIFRS. It is also encouraged, but not required, that an entity applying IFRS for the first time (IFRS), applied IFRS (IFRS) 2 for liabilities that were settled before 1 January 2005. For liabilities to which IFRS applies (IFRS) 2, from a first-time adopter of IFRS (IFRS), comparative information need not be restated to the extent that the information relates to a period or date prior to November 7, 2002.

Insurance contracts

D4 An entity that applies IFRS for the first time (IFRS), may apply the transitional conditions contained in IFRS (IFRS) 4 "Insurance contracts" . IFRS (IFRS) 4 limits changes in accounting policies for insurance contracts, including changes made by a first-time adopter of IFRSs (IFRS).

Atverbal initial cost

D5An entity may measure an item of property, plant and equipment at the date of transition to IFRSs at its fair value and use that fair value as deemed cost at that date.

D6A first-time adopter of IFRSs may choose to use the previous GAAP revaluation of an item of property, plant and equipment at (or before) the date of transition to IFRSs as the deemed cost at the revaluation date if, at the revaluation date, the revalued amount was in its entirety comparable:

(a)at fair value; or

(b)cost or amortized cost under IFRS adjusted to reflect, for example, changes in a general or special price index.

D7The exceptions described in paragraphs D5 and D6 may also be used:

(a)for investment property, if an entity elects to use the cost model in IAS 40"Investment property" ; And

(b)for intangible assets that meet:

(i)the recognition criteria in IAS 38 (including reliable measurement of cost); And

(ii)the revaluation criteria in IAS 38 (including the existence of an active market).

An entity shall not apply these exemptions to other assets or liabilities.

D8 A first-time adopter may have determined the estimated value under previous GAAP for some or all of its assets and liabilities by measuring them at fair value at one particular date, following an event such as a privatization or an initial public offering of shares.

(a) If the measurement date is the date of transition to IFRSs or an earlier date, an entity may use that event-driven fair value measurement as the estimated cost for IFRS purposes at the measurement date.

(b) If the measurement date is later than the date of transition to IFRSs, but within the period covered by the first IFRS financial statements, an event-driven fair value measurement may be used as a cost estimate if such events occur. The entity shall recognize the related adjustments directly in retained earnings (or, if appropriate, in some other category of equity) at the measurement date. At the date of transition to IFRSs, an entity shall either establish a cost estimate by applying the criteria in paragraphs D5–D7 or measure assets and liabilities in accordance with the other requirements in this Standard.

D8 AIn accordance with some national accounting requirements, the costs of exploration and development of oil and gas assets during the development or production phases are included in cost accounting that includes all property, plant and equipment within a large geographic area. An entity that applies IFRS for the first time ( IFRSs ) that uses such accounting under previous GAAP may measure oil and gas assets at the date of transition to IFRSs on the following basis:

(a) examination and evaluation of assets at the amount established in accordance with the entity's previous GAAP; And

(b) development or production assets at the amount established for cost accounting under the entity's previous GAAP. The entity must allocate this amount proportionally to the underlying cost accounting assets using the allowance or inventory estimate at that date.

An entity shall test exploration and evaluation assets, as well as assets in the development and production stages, for impairment at the date of transition to IFRSs (IFRSs) in accordance with IFRS (IFRS) 6 "Exploration and evaluation of mineral reserves » or IFRS (IAS) 36 accordingly, and if necessary, reduce the amount specified in paragraphs. (a) or (b) above. For the purposes of this paragraph, oil and gas assets include only those assets used in the exploration, appraisal, development or production of oil and gas.

D8B Some entities own property, plant and equipment or intangible assets that are or have been used in transactions subject to rate regulation. The carrying amounts of such properties may have included amounts that were determined under previous GAAP but do not qualify for capitalization under IFRS. In such a case, a first-time adopter may elect to use the item's carrying amount under previous GAAP at the date of transition to IFRSs as the estimated cost. If an entity applies this exception to any item, it is not required to apply that exception to all items. At the date of transition to IFRSs, an entity shall test for impairment in accordance with IAS 36 each item for which this exemption applies. For the purposes of this paragraph, transactions are transactions subject to tariff regulation if they supply goods or services to customers at prices (i.e. tariffs) established by the authorized body, which are entitled to establish tariffs that are binding on customers and are designed to recover certain costs, incurred by an enterprise in the provision of regulated goods or services, as well as the receipt of nominal income. Nominal income may be defined as a minimum income level or range and is not necessarily a fixed or guaranteed income.

Rent

D9An entity that applies IFRS for the first time (IFRS) may apply the transition conditions set out in the IFRS Interpretation (IFRIC) 4 "Determining if there is a lease agreement in the agreement" . Thus, an entity applying IFRS for the first time (IFRS) can determine whether an agreement in existence at the date of transition to IFRSs provides for a lease (IFRS), based on the facts and circumstances existing at that date.

D9 AIf an entity applying IFRS for the first time has made the same determination as to whether an agreement provides for a lease under previous GAAP, as required by IFRIC 4, but not on the date required by IFRIC 4, then an entity first-time adopter of IFRSs, there is no need to reassess this definition when applying IFRSs. In order for an entity to be able to make the same determination as to whether an agreement contains a lease under previous GAAP, that determination would need to produce the same result as would result from applying IAS 17.Rent » and IFRIC (IFRIC) 4.

Employee benefits

D10According to IFRS (IAS) 19 "Employee Benefits" an entity may choose to use the corridor method, in which some actuarial gains and losses remain unrecognised. Applying this approach retrospectively, an entity is required to share cumulative actuarial gains and losses from the start date of the plan to the date of transition to IFRSs (IFRS) into recognized and unrecognized parts.However, a first-time adopter of IFRSs may recognize all cumulative actuarial gains and losses at the date of transition to IFRSs, even if it uses the corridor method for subsequent actuarial gains and losses. If nfirst-time adopter of IFRSIFRS) makes such a decision, it shall apply it to all plans.

D11An entity may disclose the amounts in accordance with paragraph 120A(p) of IAS 19 because those amounts are determined prospectively for each reporting period from the date of transition to IFRSs.

Accumulated differences when translated into another currency

D12IAS 21 requires an entity to:

(a)recognize some currency translation differences in other comprehensive income and accumulate them in a separate component of equity; And

(b) on disposal of a foreign operation, reclassify the cumulative foreign currency translation difference attributable to that foreign operation (including, where applicable, gains and losses on related hedges) from equity to profit or loss as part of the gain or loss on disposal.

D13However, a first-time adopter of IFRSs is not required to comply with those requirements for cumulative currency translation differences that existed at the date of transition to IFRSs.

(a)accumulated translation differences for all foreign operations are assumed to be nil at the date of transition to IFRS; And

(b)the gain or loss on the subsequent disposal of any foreign operation shall not include currency translation differences that arose prior to the date of transition to IFRSs, but shall include subsequent differences.

Investments in subsidiaries, jointly controlled entities and associates

D14When an entity prepares separate financial statements, IAS 27 requires an entity to account for investments in subsidiaries, jointly controlled entities and associates:

(a) either at cost or

(b) under IFRS (I FRS ) 9.

D15 If a first-time adopter of IFRSs (IFRS) measures such investments at cost under IFRS ( IAS ) 27 , it must report such investments as one of the following in its opening IFRS statement of financial position:

(a) cost, determined in accordance with IAS 27; or

(b) notional cost. The notional cost of such an investment would be:

(i) their fair value (determined in accordance with IFRS (I FRS 9) as of the date of the entity's transition to IFRS in its separate financial statements; or

(ii) their carrying amounts under previous GAAP at that date.

An entity applying IFRSs for the first time may choose either (i) or (ii) to measure its investment in a subsidiary, jointly controlled entity or associatethat an entity measures using a notional cost.

Assets and liabilities of subsidiaries, associates and joint ventures

D16 If the first application of IFRSs by a subsidiary occurs after the parent has applied them, then the subsidiary shall measure assets and liabilities in its financial statements at a cost that is either:

(a)The carrying amount that would have been included in the parent's consolidated financial statements based on the parent's date of transition to IFRS if no adjustments were made for consolidation purposes to reflect the results of the business combination in which the parent acquired the subsidiary; or

(b)the carrying amount required by the remaining provisions of this IFRS as determined at the date of transition to IFRSs of the subsidiary. This carrying amount may differ from that described in paragraph (a):

(i)if the exemptions in this IFRS result in measurements dependent on the date of transition to IFRSs;

(ii)when the accounting policies used in the financial statements of a subsidiary differ from those used in the consolidated financial statements. For example, a subsidiary may use the cost accounting model in IAS 16 as its accounting policy."Fixed assets" , while the group may use the revaluation model.

A similar choice is available for an associate or joint venture that first adopts IFRSs later than an entity that has significant influence or joint control over them.

D17However, if the application of IFRSs by the parent occurs after the application of IFRSs by the subsidiary (or associate or joint venture), then the entity shall measure the assets and liabilities of its subsidiary (or associate or joint venture) in its consolidated financial statements. at the same carrying amount as in the financial statements of the subsidiary (or associate or joint venture) after adjustments for consolidation, adjustments in equity and for the results of a business combination in which the parent acquired the subsidiary. Similarly, if a parent's application of IFRSs for its separate financial statements occurs after or before their application for its consolidated financial statements, then the entity shall measure its assets and liabilities at the same amounts in both financial statements, except for adjustments for consolidation.

Compound financial instruments

D18IAS 32"Financial Instruments: Presentation of Information" requires an entity to separate a compound financial instrument into separate debt and equity components from the outset. If the debt component no longer exists, then retrospective application of IAS 32 results in the two elements being recognized separately in equity. The first element is included in retained earnings and represents accrued interest accumulated in the debt component. The other element is the original equity component. However, under this IFRS, a first-time adopter of IFRSs is not required to separate the two elements if the debt component no longer exists at the date of transition to IFRSs.

Definition of previously recognized financial instruments

D19 IFRS 9 allows a financial liability to be classified as a financial liability at fair value through profit or loss (provided it meets certain criteria). Notwithstanding this requirement, an entity is permitted to classify, at the date of transition to IFRSs, any financial liability as measured at fair value through profit or loss at that date, provided that the liability satisfies the criteria in in paragraph 4.2.2 of IFRS (IFRS 9).

D19A An entity may classify a financial asset as at fair value through profit or loss in accordance with paragraph 4.1.5 of IFRS 9, based on the facts and circumstances that existed at the date of transition to IFRSs.

D19B An entity may classify investments in equity instruments as measured at fair value through other total income, in accordance with paragraph 5.7.5 of IFRS 9, based on the facts and circumstances that existed at the date of transition to IFRSs.

D19C If it is impracticable for an entity (in accordance with IAS 8) to apply retrospectively the effective interest rate or the impairment requirements in paragraphs 58–65 and AG84–AG93 of IAS 39, the fair value of a financial asset at the date of transition to IFRS is the new amortized cost of that financial asset at the date of transition to IFRS.

D19D An entity shall determine whether applying the accounting treatment in paragraph 5.7.7 of IFRS 9 would create an accounting mismatch in profit or loss based on the facts and circumstances that existed at the date of transition to IFRSs.

Measurement of financial assets or financial liabilities at fair value

D20 Notwithstanding the requirements in paragraphs 7 and 9, an entity may apply the requirements in the last sentence of paragraph B5.4.8 and paragraph B5.4.9 of IFRS 9prospectively for transactions entered into at the date of transition to IFRS ( IFRS ) or after that date.

Obligations for the decommissioning of facilities included in the cost of property, plant and equipment

D21In accordance with IFRIC 1"Changes in existing obligations for the decommissioning of facilities, restoration of natural resources and similar obligations" certain changes in decommissioning obligations, restoration of natural resources or similar obligations are added to or deducted from the cost of the asset associated with such a liability; The adjusted depreciable cost of an asset is depreciated prospectively over its useful life. The company, which is the first to useIFRS (IFRS) is not required to comply with these requirements for changes in those liabilities that occurred prior to the date of transition to IFRSs (IFRS). If ncompany for the first time usingIFRS (IFRS) uses this exception, it should

(a) measure the liability at the date of transition to IFRS (IFRS) in accordance with IFRS (IAS) 37;

(b) to the extent that the obligation is within the scope of the IFRS Interpretation (IFRIC1) make an estimate of the amount that would be included in the cost of the underlying asset when the liability initially arose by discounting the liability to that date using the best estimate of the historical risk-adjusted discount rate(s) that would apply to that liability at throughout the exposure period; And

(c) calculate the accumulated depreciation for such an amount at the date of transition to IFRS (IFRS) based on the current estimate of the useful life of the asset, applying the depreciation policy adopted by the entity under IFRS (IFRS).

D21 AAn entity applying the exemption in paragraphD8 A(b) (for cost-accounted development or production oil and gas assets that include all property, plant and equipment within a large geographic area under previous GAAP) should instead of applying paragraphD21 or IFRS (IFRIC) 1:

(a) assess the decommissioning of facilities,recovery of natural resources and similar liabilities at the date of transition to IFRS (IFRSs) in accordance with IFRS (IAS) 37; And

( b ) recognize directly in retained earnings the difference between this amount and the carrying amount of these liabilities at the date of transition to IFRS (IFRSs) established under its previous GAAP

Financial assets and intangible assets accounted for in accordance with IFRIC 12

D22An entity that applies IFRS for the first time (IFRS) may use the transitional provisions set out in IFRIC 12.

Borrowing costs

D23 A first-time adopter of IFRS (IFRS) may use the transitional provisions set out in paragraphs 27 and 28 of IFRSs (IAS) 23 as amended in 2007. In these paragraphs, references to the effective date are replaced by January 1, 2009 or the date of transition to IFRS (IFRS) whichever is later.

Transfer of assets from clients

D24 A first-time adopter of IFRSs may apply the transitional provisions in paragraph 22 of IFRIC 18Transfer of assets from clients ". In this paragraph, reference to an effective date means the later of 1 July 2009 or the date of transition to IFRSs. In addition, a first-time adopter may designate any date prior to the date of transition to IFRSs and apply IFRIC 18 to all transfers of assets from customers that occur on or after that date.

Poga settlement of financial liabilities with equity instruments

D25 A first-time adopter of IFRSs may apply the transition provisions set out in IFRIC 19 Extinguishing Financial Liabilities with Equity Instruments.

heavyhyperinflation

D26 If an entity uses a functional currency that was, or is, the currency of a hyperinflationary economy, the entity shall determine whether the currency experienced severe hyperinflation prior to the date of transition to IFRSs (IFRS). This applies to entities that have used IFRS (IFRS) for the first time, as well as entities that previously used IFRS (IFRS).

D27 The currency of a hyperinflationary economy is subject to severe hyperinflation if it has both of the following characteristics:

(a) a reliable general price index is not available for all businesses with transactions and balance sheets in a currency.

( b ) lack of fungibility between a currency and a relatively stable foreign currency.

D28 The entity's functional currency ceases to be subject to severe hyperinflation at the date the functional currency normalizes. This is the date on which the functional currency no longer falls within the definition of one or both of the characteristics in paragraphD27, or when an entity changes its functional currency to a currency that is not subject to severe hyperinflation.

D29 If an entity's date of transition to IFRSs (IFRS) is on or after the functional currency normalization date, an entity may elect to measure all assets and liabilities held before the functional currency normalization date at fair value at the date of transition to IFRSs (IFRS). An entity may account for this fair value as the deemed cost of those assets and liabilities in its opening IFRS statement of financial position.

D30 If the functional currency normalization date falls within a 12-month comparative period, then the comparative period may be less than 12 months, provided that a complete set of financial statements is presented for that shorter period.

Appendix E
Short-term exemptions from IFRS

This appendix is ​​an integral part of this IFRS ( IFRS ).

Exemption from the requirement to restate comparative information under IFRS 9 E1 In its first IFRS financial statements, an entity that (a) adopts IFRS for annual periods beginning before 1 January 2012 and (b) applies IFRS 9 must present comparative information for at least one year. However, this comparative information does not need to comply with IFRS 7 Financial Instruments: Disclosures or IFRS 9 if the disclosures required by IFRS 7 relate to items within the scope of IFRS 9. For such entities, only when applying IFRS 7 and IFRS 9, references to the “date of transition to IFRS” refer to the start of the first IFRS reporting period.

E2 An entity that elects to present comparative information that does not comply with the requirements of IFRS 7 and IFRS 9 shall, in its first year of transition to IFRSs:

(a) apply the recognition and measurement requirements under their previous GAAP instead of the requirements of IFRS 9 to comparative information about items within the scope of IFRS 9.

(b) disclose this fact along with the basis used to prepare this information.

(c) consider any adjustment between the statement of financial position at the reporting date of the comparative period (i.e. a statement of financial position that includes comparative information in accordance with previous GAAP) and the statement of financial position at the beginning of the first reporting period on IFRS (i.e. the first period that contains information that is consistent with the requirements of IFRS 7 and IFRS 9) as arising from a change in accounting policy and make the disclosures required by paragraph 28 (a)-(e) and (f)(i) IAS 8. Paragraph 28(f)(i) applies only to the amounts presented in the statement of financial position at the reporting date of the comparative period.

(d) apply paragraph 17(c) of IAS 1 to provide additional disclosures when compliance with the specific requirements of IFRSs is not sufficient to enable users to understand the impact of specific transactions, other events and circumstances on the entity’s financial position and performance .

Disclosureinformation regarding financial instruments

E3 A first-time adopter of IFRS ( IFRSs ), can apply transition conditions to new order accounting, prescribed in paragraph 44 G IFRS ( IFRS ) 7.

Such changes include reclassifications from intangible assets or to intangible assets if goodwill was not recognized as an asset under previous GAAP. This would happen if, under previous GAAP, an entity ( a) deducted goodwill directly from equity, or (b) did not account for the business combination as an acquisition.

Paragraph E3 was added as a result of an amendment to IFRS (IFRS) 1 "Ohlimited exemption from comparative disclosures under IFRS 7 for first-time adopters of IFRS released in January 2010. To avoid the potential use of later information about past events and to ensure that first-time adopters of IFRSs (IFRSsIFRSsIFRS) 7 "Improved disclosures for financial instruments ».

Paragraph E4 was added as a result of an amendment to IFRS (IFRS) 7 Disclosure—Transfer of Financial Assetsreleased in October 2010. To avoid the potential use of later information about past events and to ensure that first-time adopters of IFRSs (IFRSs) was not prejudiced compared to current IFRS entities, the Board decided that first-time adopters should be allowed to use the same transition conditions that are permitted for entities preparing their financial statements in accordance with IFRS (IFRSs), which are included in the amendments to IFRS (IFRS) 7 "Disclosure—transfer of financial assets ».

FTOIFRSA 11

A company transitioning from national standards to IFRS must comply with the requirements of IFRS 1, the main of which is the full retrospective application of all IFRS standards in force at the reporting date of the first IFRS financial statements.

The process of transition to IFRS is not simple, as a result, the IASB developed the standard IFRS (IFRS) 1 "First-time adoption of IFRS", which came into force on 01.01.2004. It is mandatory for use by all companies that prepare financial statements for the first time in accordance with IFRS, and contains a clear algorithm for preparing such statements. This standard provides a definition of an entity's first IFRS financial statements, which is the first annual financial statement in which an entity adopts IFRS and makes a clear and unconditional statement of full compliance with IFRS.

IFRS financial statements will be the first IFRS financial statements if the company:

• presented its most recent previous financial statements;
• prepared financial statements in accordance with IFRS for internal use only, without presenting them to the company's owners or external users;
• prepared a set of financial statements in accordance with IFRS for the purposes of consolidation without preparing a complete set of financial statements;
• did not present financial statements for previous periods.

This standard cannot be applied if the company:

• ceases to present financial statements in accordance with national requirements, having previously presented them, as well as a second set of financial statements containing a clear and unconditional statement of compliance with IFRS;
• in the previous year, presented financial statements in accordance with national requirements and financial statements containing a clear and unconditional statement of compliance with IFRS;
• in the previous year presented financial statements containing a clear and unconditional statement of compliance with IFRS, even if the auditors based their audit report on those financial statements with qualifications.

There are a number of allowable and four mandatory exceptions to the requirement to apply IFRS retrospectively.

Allowed Exceptions apply to the provisions of standards for which, in the opinion of the IASB, retrospective application may be too complex or may result in costs in excess of any benefits to the user. Allowed exceptions are voluntary. At the discretion of the company's management, allowable exceptions may be applied selectively, all at once, or the company may not use them at all.

Permissible exceptions apply to the following areas of accounting:

• - business combinations;
• - share-based payments;
• - insurance contracts;
• - the use of fair value or revaluation as a conditional estimated cost of fixed assets and certain other assets;
• - rent;
• - employee benefits;
• - accumulated reserve of exchange rate differences;
• - investments in subsidiaries, jointly controlled and associated companies;
• - assets and liabilities of subsidiaries, associates, joint ventures;
• - combined financial instruments;
• - classification of previously recognized financial instruments;
• - measurement of the fair value of financial assets and liabilities upon initial recognition;
• - reserves for liquidation activities and restoration of the environment as part of fixed assets;
• - concession agreements in the field of social services;
• - borrowing costs.

Mandatory exceptions apply to areas of accounting where retrospective application of IFRS requirements is considered inappropriate. Mandatory exemptions fall into four areas:

• performance indicators;
• derecognition of financial assets and liabilities;
• hedge accounting;
• some aspects of accounting for non-controlling ownership interests.

Comparative Information also presented under IFRS.

Nearly all adjustments associated with the first adoption of IFRS are attributed to retained earnings at the beginning of the earliest period for which comparative information is presented in accordance with IFRS.

The first IFRS financial statements must also include a reconciliation of certain amounts presented in accordance with previous US GAAP and IFRS.

Key milestones for the transition to IFRS

1. Determination of the reporting date and date of transition. That is, to establish the beginning of the earliest of the periods for which comparative information is presented in the financial statements and the reporting date (the end of the last reporting period for which financial statements are prepared).

2. Formation of accounting policy in accordance with IFRS. The same accounting policies should be used for all periods presented, including for opening IFRS balances.

3. Definition of asset and liability items under IFRS. At the same time, an asset or liability can be accepted for accounting under IFRS, even if they are not reflected in accounting under Russian standards, and vice versa.

4. Valuation of assets and liabilities under IFRS. The valuation of the opening balances and amounts presented in the financial statements in accordance with IFRS should be made in accordance with IFRS. As a result, all recognized assets and liabilities must be measured in accordance with IFRS in one of the following ways:

At cost;

At fair value, i.e. the amount for which an asset can be exchanged or a liability settled in a transaction between informed, interested and independent parties;

By discounted amount.

5. Adjustment of capital and reserves. After the company has completed all the stages listed above, a situation may arise when the amount of its net assets will differ from the amount of capital and reserves formed in accordance with Russian legislation. According to IFRS 1, this difference must be recognized in retained earnings.

Difficulties and mistakes

One of the difficulties encountered in the first application of IFRS is the determination of the historical cost of property, plant and equipment. Often absent from the company this information and there is a need to involve an independent appraiser. This problem is especially relevant for non-profit organizations that are legally established to keep accounting records of fixed assets and their depreciation off the balance sheet. Therefore, when transferring financial statements to the IFRS format, a clear assessment of all fixed assets is required non-profit organization, including objects worth up to 40 thousand rubles, and classification with respect to the source of acquisition and their use in business activities. This requires a complete analysis of all primary documents accounting for fixed assets.

You should also pay attention to a typical mistake when all adjustments related to the transition to IFRS are reflected in the profit (loss) of the reporting period, i.e. are actually accounted for twice: in the income statement for the current year and in comparative information. As a result, the assessment of assets and liabilities in the balance sheet complies with IFRS, and the profit reflected in the income statement is not equal to the change in the corresponding indicators of the balance sheet at the end and beginning of the period. In this regard, it is necessary to attribute part of the adjustments to retained earnings of previous periods, and the corresponding transactions recorded in the current year at Russian rules accounting, be excluded from the income statement.

Recalculation of all accounting data for the previous two years in accordance with IFRS causes significant difficulties for companies, therefore, in practice, many of them violate this requirement. They use the interim version of IAS 34 Interim Financial Reporting when the first published report is provisional. It includes only the balance sheet at the date of transition to IFRS (that is, at the reporting date) or indicators for one year, but without comparable data for the previous period.

In addition, IFRS 1 requires reporting of adjustments to equity and net income based on Russian data to bring them in line with IFRS. This means that a reconciliation of equity must be provided, including at the date of transition to IFRS.

Most often, companies take the opportunity to value certain non-current assets at fair value at the date of transition to IFRS (fair value as considered cost). This voluntary exemption avoids determining the carrying value of assets based on historical cost, taking into account depreciation and impairment losses, as well as taking into account hyperinflation.

2.1 Application examples of IFRS 1 First-time Adoption of IFRSs

1) EXAMPLE - opening IFRS balance sheet

2) EXAMPLE - previously applied national regulations

Have you previously reported in accordance with Russian standards accounting.

Russian Accounting Standards are your previously applied national rules.

3) EXAMPLE - reporting date

4) EXAMPLE - interim financial statements

You also prepare interim financial statements for January-June 2XX8. It contains a clear and unconditional statement of compliance with IFRS.

You apply IFRS 1 in preparing your interim financial statements.

5) EXAMPLE - for external use only

You have decided to publish IFRS financial statements for 2XX8 containing comparative data for 2XX3-2XX7. It contains a clear and unconditional statement of compliance with IFRS. No interim financial statements have been prepared.

Figures for 2XX3-2XX7 are derived from management accounts that were reviewed only by your directors.

Your first IFRS financial statements are for 2XX8.

6) EXAMPLE - accounting policy

Your accounting policies in all years must be those applicable to 2XX8.

7) EXAMPLE - adjustments arising from events and transactions before the date of transition to IFRS

In accordance with previously applied national rules, you recognized intangible assets that are not recognized under IFRS.

The corresponding adjustments are accounted for in retained earnings and the related information is disclosed.

8) EXAMPLE - fair value under previous national rules - 1

In accordance with previously applied national rules, you have revalued your property using an independent appraisal. You have been informed that the values ​​of the indicators as of the date of transition to IFRS have not changed significantly.

You may use these valuation values ​​as estimated costs under IFRS.

9) EXAMPLE - a company applies IFRS for the first time later than its subsidiary

In 2XX7, your subsidiary applied IFRS for the first time. In 2XX8, your company applied IFRS for the first time.

In preparing the consolidated financial statements, you use the same carrying amounts of assets and liabilities as the subsidiary (in 2XX8), except for the consolidation adjustments required in the preparation of the consolidated financial statements.

10) EXAMPLE - revision of estimates

The company's date of transition to IFRS is 1 January 2XX4, and the new information of 15 July 2XX4 requires a revision of the bad debt allowance estimate made in accordance with previously applicable national rules at 31 December 2XX3.

The company does not need to reflect this new information in its opening IFRS balance sheet (unless estimates need to be adjusted due to differences in accounting policies, or there are cases where the error can be objectively confirmed).

Instead, the entity must reflect this new information in its income statement (or other changes in equity, as appropriate) for the year ending December 31, 2XX4.

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COURSE WORK

"First Application of International Financial Reporting Standards"

Almaty 2010

Introduction

1. Organization of the first application of IFRS

2. Voluntary exceptions in the preparation of the entrance

balance sheet when first applying IFRS

3. Mandatory exemptions in the preparation of financial statements

when first applying IFRS

4. Presentation and disclosure of information at the first

application of IFRS

Conclusion

List of used literature

Applications

Introduction

Due to the difficulties of implementing and understanding IFRS, the Board of the IASB developed and in 2003 adopted IFRS 1 “First-time Adoption of International Financial Reporting Standards”. This standard is now used alongside IAS 1 Presentation of Financial Statements. The reasons for its development are as follows:

Insufficiently satisfactory results in the recognition and application of international financial reporting standards in the world accounting practice;

The need to raise the status of methodological approaches to reporting under IFRS in companies that apply standards for the first time; international financial reporting standard

Lack of elaboration and clarity regarding the first application of IFRS as interpreted by CRP-8 "Initial application of IFRS as the main basis of accounting".

IFRS 1 “First-time Adoption of International Financial Reporting Standards” came into force on January 1, 2004. Thus, an organization that has decided to apply IFRS for reporting uses it when generating data based on the results of work for 2005. In the standard detailed guidance is given that it should be used by entities that prepare financial statements for a period beginning on the effective date of IFRS 1. In addition, this standard is followed if an entity chooses to use international standards as the primary reporting basis later than the effective date of the standard. If a company prepared IFRS financial statements for internal use and did not present them to external consumers, then the provisions and requirements of this standard should also be implemented when preparing financial statements that comply with international principles.

IFRS 1 “First-time Adoption of International Financial Reporting Standards” can be fully used when an entity has prepared reports in previous reporting periods using separate standards. It can also be used by organizations that previously prepared reports in accordance with the fundamental principles of international standards, but, despite the fact that it was used by external and internal users, it was impossible to unequivocally state that all the requirements of IFRS were met. In addition, the standard should be used by entities that previously prepared financial statements in accordance with national requirements and national standards that partially comply with IFRS. At the same time, there was no statement that this organization presented financial statements in full compliance with the provisions of IFRS. Thus, the provisions of IFRS 1 “First-time Adoption of International Financial Reporting Standards” indicate that first-time adopters of IFRS are those that present useful, reliable and reliable information in their financial statements that fully comply with all the requirements of IFRS. However, IFRS 1 need not be applied when an entity has done the following in the past:

1. Prepared financial statements in accordance with the requirements of national standards and IFRS and stated in the statements that it had generated its data in full compliance with international standards.

2. Presented financial statements in accordance with the requirements of national standards, while declaring that such statements are fully consistent with IFRS.

3. Presented financial statements prepared in accordance with IFRS, indicating that it fully complies with international standards, although the auditors expressed doubts in the form of a reservation in the auditor's report.

Relevance of the topic this study is due to the fact that the application of international standards financial reporting can lead to both positive and negative consequences for companies. Among the positive aspects are increased transparency, improved comparability of indicators and, as a result, increased opportunities for analyzing their activities and facilitating access to international markets capital.

The purpose of the work is a study of IFRS 1 “First-time adoption of International Financial Reporting Standards.

To achieve this goal, it is necessary to solve the following tasks:

Consider the features of the first application of IFRS 1;

Familiarize yourself with the basic definitions;

Identify mandatory exceptions in the preparation of financial statements when first applying IFRS;

To study the specifics of presentation and disclosure of information when first applying IFRS.

1. Organization of the first application of IFRS 1

The main goal of IFRS 1 is to prepare the first financial statements based on the results of the year, as well as interim statements within the financial year, containing high-quality information about the organization that meets the following requirements: - transparency and understandability for users;

Comparability with the financial statements of previous reporting periods;

Providing an appropriate starting point for those companies that prepare financial statements for the first time under IFRS;

Comparability of benefits and costs of compiling and reporting according to international standards.

IFRS 1 sets out the requirements for companies applying the IFRS for the first time - when the company's financial statements for the first time contain a clear and unconditional statement of compliance with the IFRS.

In general, IFRS 1 requires an entity, when presenting its first IFRS financial statements, to comply with each IFRS that is effective at the balance sheet date. Specifically, IFRS 1 requires an entity to do the following when preparing an opening IFRS balance sheet that serves as the starting point for accounting in accordance with IFRS:

1. recognize all assets and liabilities that are required to be recognized in accordance with IFRS;

2. not recognize items as assets or liabilities if the IFRS does not allow such recognition;

3. reclassify items that were recognized under previous national rules as a single class of asset, liability or equity in accordance with IFRS;

4. apply IFRS when measuring all recognized assets and liabilities.

IFRS 1 provides for a number of exceptions to these requirements in certain areas where the costs of compliance may outweigh the benefits to users.

IFRS 1 also prohibits the retrospective application of IFRSs in certain areas, in particular where retrospective application would require management to make judgments about past conditions after the outcome of a particular transaction is already known.

IFRS 1 requires disclosures that explain how the transition from previously applied national rules to IFRS has affected an entity's reported financial position, financial performance and cash flows.

The needs of companies applying IFRS for the first time are taken into account when adopting new IFRS standards and amending existing ones. Where these needs differ from those of existing users, IFRS 1 is amended and amended. Accordingly, IFRS 1 is subject to constant change.

An entity shall apply IFRS 1:

1. when preparing its first IFRS financial statements;

2. in the preparation of each interim financial statement, if any, that is presented in accordance with IAS 32 for a portion of the period covered by its first IFRS financial statement.

A company's first IFRS financial statements are the first annual financial statements prepared by a company in accordance with IFRS and contain a clear and unreserved statement of compliance with IFRS.

IFRS financial statements are the first IFRS financial statements if, for example, an entity:

1. presented its most recent previous financial statements:

· in accordance with national requirements that do not comply with IFRS in all respects;

· in accordance with IFRS in all respects, except that the financial statements do not contain a clear and unconditional statement of compliance with IFRS;

· according to national requirements that do not comply with IFRS, using some separate IFRS to account for items for which there are no national requirements; or

· in accordance with national requirements and containing a reconciliation of certain amounts and amounts determined in accordance with IFRS;

2. has prepared financial statements in accordance with IFRS for internal use only, without making them available to the company's owners or external users;

3. has prepared a set of financial statements in accordance with IFRS for the purposes of consolidation without preparing a complete set of financial statements as set out in IAS 1; or

4. did not submit financial statements for previous periods.

IFRS 1 does not apply when, for example, an entity:

1. ceases to present financial statements in accordance with national requirements, having previously presented them, as well as a second set of financial statements containing a clear and unconditional statement of compliance with IFRS;

2. in the previous year, presented financial statements in accordance with national requirements and financial statements containing a clear and unreserved statement of compliance with IFRS; or

3. presented financial statements in the previous year containing a clear and unconditional statement of compliance with IFRS, even if the auditors based their audit report on those financial statements with qualifications

IFRS 1 does not apply to changes in accounting policies made by an entity that already applies IFRS. Such changes are subject to:

1. requirements for changes in accounting policies established by IFRS (IAS 8);

2. specific transitional requirements set out in other IFRSs.

When preparing financial statements for the first time using the provisions of IFRS 1 First-time Adoption of International Financial Reporting Standards, an entity must consider a number of mandatory requirements. First, when forming indicators of financial statements, transitional provisions contained in other standards should not be used. Second, given that IFRS 1 proposes nine exceptions that can be exercised in the preparation of financial statements, it is mandatory to comply with three of them, and for the remaining six, compliance is voluntary.

In order for the data of the previous reporting period (usually the financial year) to be presented in the IFRS financial statements, it is necessary to recalculate the information previously provided by the organization in the statements prepared in accordance with national rules and requirements. These data should be comparable with the reporting indicators obtained taking into account international methodological approaches, contained, among other things, in IFRS (IFRS) 1. Therefore, despite some individual simplifications of the standard for the first application of IFRS, the process of transition to IFRS and preparation of the first reporting is complex . However, when an entity has made a decision to transition to IFRS, or if the transition to international standards is a prerequisite, the fulfillment of which will allow it to solve important strategic objectives, it is necessary according to IFRS 1 to fulfill the following conditions:

Determine which financial statements of the company will be the first under IFRS;

Prepare the opening balance sheet in accordance with IFRS at the date of transition;

Select an accounting policy consistent with IFRS and apply it retrospectively for all periods presented in the first IFRS financial statements;

Decide on the application of any of the six possible voluntary exceptions that exempt from the retrospective application of standards;

Apply three mandatory exceptions when retrospective application of standards is not permitted;

Disclose detailed information in the financial statements explaining the specifics of the company's transition to IFRS.

In general, the date of transition to IFRS is the date on which comparative data for the previous or several previous reporting periods will be disclosed in the financial statements. For example, if an organization, when preparing financial statements in accordance with IFRS, presents comparative figures for 2004 in it, then the date of transition to IFRS is January 1, 2004. When such data is also presented for 2003, then the date of transition is January 1, 2003 G.

In practice, companies may encounter a situation where, between the date of transition to IFRS and the date of initial reporting under international standards, there have been changes in the methods for calculating individual indicators. New methods should be presented in the financial statements as changes in accounting policies. However, the study and analysis of such financial statements by external users will be difficult due to a lack of understanding of why the change in accounting policy occurred when IFRS were initially applied. Therefore, IFRS 1 allows companies to voluntarily use the standards as amended at the date of transition to IFRS when calculating financial statements for the first time, regardless of whether they have changed at the date of preparation of financial statements in accordance with international standards or not.

The next condition for the transition of the organization to IFRS is the preparation of the opening balance sheet on the date of transition to IFRS, which is a complex and very time-consuming work. IFRS 1 provides a list of tasks to be completed at this stage.1. Recognition of those assets and liabilities of an entity that are such in accordance with the provisions of IFRS. For example, under IAS 38 Intangible Assets, the conditions for recognizing an intangible asset acquired externally or created internally are that the following requirements are met:

Obtaining future economic benefits from the use of this asset;

Reliability of asset valuation.

IFRS 38 “Intangible Assets” also prohibits classifying objects created within the company as intangible assets: goodwill, trademarks, publicity rights, customer lists, etc.

If assets and liabilities have never been recognized in the financial statements, but should be recognized under IFRS, they are included in the financial statements.

2. Reclassification of assets, liabilities and capital of the organization based on methodological approaches and IFRS requirements. For example:

IFRS 10 "Events after the balance sheet date" does not provide an opportunity to treat accrued dividends based on the results of work for the reporting period as a liability at the reporting date. These amounts are included in retained earnings, which are presented in the opening IFRS balance sheet, income statement and statement of changes in equity;

When it is necessary to present information in financial statements by segments (different types of products, services, as well as different geographical regions). If such information is not determined by national accounting and reporting rules, it is also necessary to highlight such information, conduct appropriate calculations and change financial reporting indicators to meet the requirements of IFRS;

The preparation of consolidated financial statements in accordance with international standards is based on the provisions of IFRS 27 “Consolidated Financial Statements and Accounting for Investments in Subsidiaries”, which discloses the reporting methods for a group of organizations controlled by one parent organization, as well as the procedure for reflecting investments in subsidiaries in the financial statements of the parent company companies.

3. Refinement of the assessment of assets, liabilities and capital presented in the opening balance sheet under IFRS, based on the methods used in international accounting practice.

To clarify the assessment of balance sheet indicators and other forms of financial statements in accordance with IFRS, it is necessary to use the following rules:

IFRS 2 Inventories, revaluing inventories at the lower of cost (FIFO, average or alternate LIFO) and net realizable value (excluding possible costs to sell);

IFRS 39 Financial Instruments: Recognition and Measurement, remeasuring trading financial assets, financial assets available-for-sale, derivative financial assets, trading financial liabilities, derivative financial liabilities at fair value;

IAS 40 Investments in Real Estate, remeasuring investments in real estate at fair value;

IFRS 16 Property, Plant and Equipment, revising the useful lives of assets and justifying them irrespective of the useful lives established by the Government of the Russian Federation for income tax purposes;

IFRS 37 “Reserves, contingent liabilities and contingent assets”, by creating reserves that are not created in national accounting practice, and using the discounting requirement;

IAS 36 Impairment of Assets by revaluing an entity's assets at an amount not exceeding its recoverable amount if their carrying amount exceeds the amount that would be recovered from the use or sale of those assets. Moreover, the amount of the revaluation should be presented in the balance sheet and disclosed in the notes to the financial statements as an impairment loss;

IFRS 12 Income Taxes, calculating deferred tax liabilities and deferred tax requirements based on the requirements of this standard;

IFRS 29 "Financial Reporting in Hyperinflationary Conditions", used in calculating the indicators of assets and liabilities as of January 1, 2003, since before this period the Republic of Kazakhstan was considered as a country with a hyperinflationary economy. The historical cost of reporting information in such reporting periods should be recalculated taking into account the inflation index.

After clarification of the assessment of assets and liabilities presented under the items of the opening balance sheet, deviations from the amounts previously presented in the statements are calculated.

They are accounted for as an integral part of the entity's equity and are recognized in the balance sheet at the date of transition to IFRS under Retained Earnings or another equity group item where this is permitted.

4. Since the balance sheet provides information for several reporting periods, the opening balance sheet items should be formed based on the same accounting policy.

Moreover, if in the future the methods and methods of accounting fixed in the accounting policy of the organization for accounting purposes are revised, the opening balance sheet indicators should also be recalculated for the purpose of comparability.

Opening balance sheet under IFRS.

An entity must prepare an opening IFRS balance sheet at the date of transition to IFRS. This document serves as the starting point for accounting in accordance with IFRS. A company is not required to present its opening IFRS balance sheet in its first IFRS financial statements.

Accounting policy.

An entity must use the same accounting policies in preparing the opening IFRS balance sheet and for all periods presented in its first IFRS financial statements. These accounting policies must comply with each IFRS that is effective at the reporting date of its first IFRS financial statements.

An entity should not apply other versions of IFRS that were in effect on earlier dates. An entity may apply a new IFRS that has not yet become mandatory if its provisions permit early adoption. If a new IFRS has not yet become mandatory but allows early adoption, the entity is permitted (but not required) to apply that IFRS in its first IFRS financial statements.

Transitional provisions in other IFRSs apply to changes in accounting policies made by an entity that is already using IFRSs; they do not apply to a first-time adopter of IFRS upon transition to those standards.

The accounting policies used by an entity in preparing the opening IFRS balance sheet may differ from those used on the same date in accordance with previously applicable national rules.

The corresponding adjustments arise as a result of events and transactions that occurred prior to the date of transition to IFRSs. Accordingly, the entity must account for these adjustments directly in retained earnings (or, if appropriate, in another line item in equity) at the date of transition to IFRSs. IFRS 1 establishes two categories of exceptions to the principle that an opening IFRS balance sheet must match each IFRS:

1. exceptions to certain requirements of other IFRSs;

A company may choose to measure property, plant and equipment at the date of transition to IFRS at their fair value and use that fair value as their estimated cost at that date.

A first-time adopter may use the revaluation of property, plant and equipment in accordance with previously applied national rules on the date of transition to IFRS or a later date as the estimated value at the revaluation date if the corresponding values ​​at the revaluation date are broadly comparable to:

1. fair value;

2. IFRS cost or amortized cost adjusted to reflect, for example, changes in a general or specific price index.

These options also apply to:

1. investments in real estate, if an entity chooses to use the cost model in IAS 40 Investments in Real Estate;

2. intangible assets that correspond to:

the recognition criteria set out in IAS 38 Intangible Assets (including a reliable estimate of actual costs)

· the criteria set out in IAS 38 for revaluation (including the existence of an active market).

The entity should not exercise these options on other assets or liabilities.

A first-time adopter of IFRSs may have estimated the estimated value of some or all of its assets and liabilities under previous GAAP by measuring them at fair value at a particular date due to an event, such as a privatization or public issue of new shares.

You may use such event-driven fair value measurements as estimated values ​​under IFRS at the date of such measurement.

Under IAS 19, an entity may use the “corridor” method, which provides for the option not to recognize certain actuarial gains and losses. Applying this method retrospectively requires an entity to separate the cumulative actuarial gains and losses from the inception of the pension plan to the date of transition to IFRS into the recognized part and the unrecognized part.

However, a first-time adopter may recognize all cumulative actuarial gains and losses at the date of transition to IFRSs, even if it uses the corridor method for more recent actuarial gains and losses. If a first-time adopter of IFRS uses this option, it should apply it to all pension plans. The Company may disclose information about the amounts as amounts determined for each reporting period prospectively from the date of transition.

Cumulative currency translation adjustment.

IAS 21 requires an entity to:

1. classify certain exchange differences as a separate component of equity; And

2. On disposal of a foreign operation, carry forward the cumulative translation adjustment for that foreign operation (including related hedging gains and losses) to the income statement (as part of the gain or loss on disposal).

However, a first-time adopter is not required to comply with these cumulative adjustment requirements when translating currencies that existed at the date of transition to IFRSs. If a first-time adopter uses this exemption:

1. Cumulative translation gains and losses on all foreign operations are assumed to be nil at the date of transition to IFRS;

2. Gains or losses on subsequent disposals of foreign operations must exclude foreign exchange differences that arise before the date of transition to IFRSs, but must include later foreign exchange differences.

Combined financial instruments.

IAS 32 requires an entity to analyze a compound financial instrument in terms of separating the equity and debt components, based on the circumstances that existed at the time the instrument was created. If the debt component is repaid, retrospective application of IAS 32 requires identifying two elements of equity separately.

The first element is included in retained earnings and represents the cumulative interest on the debt component.

The second element is the original equity component. However, under IFRS 1, a first-time adopter does not need to identify these two elements separately if the debt component is repaid at the date of transition to IFRS.

Assets and liabilities of subsidiaries, associates and joint ventures. If a subsidiary adopts IFRS for the first time after its parent, the subsidiary must measure its assets and liabilities either at:

1. The carrying amount that would have been included in the parent company's consolidated financial statements at the date of the parent company's transition to IFRS, if no adjustments have been made in the consolidation procedures and to account for the effects of a business combination in which the parent company acquired a subsidiary;

2. the carrying amount required by other provisions of IFRS 1 at the date of the subsidiary's transition to IFRS. These carrying values ​​may differ from those described in (1):

· when the exceptions in IFRS 1 result in valuation results that depend on the date of transition to IFRS;

when the accounting policies used in the preparation of the financial statements of a subsidiary differ from those applied to the consolidated financial statements.

3. A similar choice is available to an associate or joint venture that adopts IFRS for the first time after an entity that has significant influence or joint control over it.

However, if an entity first adopts IFRS later than its subsidiary (associate or joint venture), the entity must measure the assets and liabilities of the subsidiary (associate or joint venture) at the same carrying amount as the subsidiary (associate or joint venture). enterprise), excluding adjustments on consolidation.

Similarly, if a parent company first applies IFRS to its separate financial statements earlier or later than when preparing its consolidated financial statements, it should measure its assets and liabilities at the same cost in both sets of financial statements, except for adjustments for consolidation.

Reflection of previously recognized financial instruments.

IAS 39 allows a financial asset to be recognized on initial recognition as available-for-sale, or a financial instrument (if certain criteria are met) to be recognized as a financial asset or financial liability at fair value through profit or loss.

Despite this requirement, exceptions apply in the following circumstances:

1. an entity is allowed to account for available-for-sale at the date of transition to IFRSs;

2. An entity that presents its first IFRS financial statements for an annual period beginning on or after September 1, 2006, on the date of transition to IFRSs, is permitted to carry a financial asset or financial liability at fair value through profit or loss, provided that, at that date, the asset or liability meets the criteria in IAS 39;

3. An entity that presents its first IFRS financial statements for an annual period beginning on or before 1 September 2006, the date of transition to IFRS, is permitted to carry a financial asset or financial liability at fair value through profit or loss , provided that, on that date, the asset or liability meets the criteria set out in IAS 39. reflects financial assets and financial liabilities recognized between the date of transition to IFRS and September 1, 2005.

4. An entity that presents its first IFRS financial statements for an annual period beginning before 1 January 2006 is permitted, at the beginning of its first IFRS reporting period, to report at fair value a financial asset or financial liability (through profit or loss) that is subject to such treatment in accordance with IAS 39.

When an entity's first IFRS reporting period begins before September 1, 2005, such recognition need not be completed before September 1, 2005, but financial assets and financial liabilities recognized between the start of that period and September 1, 2005 may also be included.

If an entity restates comparative information in accordance with IAS 39, it must restate that information for financial assets, financial liabilities, or a group of financial assets, financial liabilities (or both) at the beginning of its first IFRS reporting period.

Such restatement of comparative information should only be made if the items or groups recognized would have met the criteria for such recognition at the date of transition to IFRSs or, if acquired after the date of transition to IFRSs, would have met the criteria in IAS 39 at the date of initial recognition.

5. an entity presenting its first IFRS financial statements for an annual period beginning before September 1, 2006 - financial assets and financial liabilities that such entity has designated at fair value through profit or loss and that were previously designated as a hedged item in hedge transactions at fair value must be removed from those transactions at the same time that they are recognized at fair value through profit or loss.

Share-based payment transactions.

A first-time adopter is encouraged, but not required, to apply IFRS 2 to equity instruments granted after November 7, 2002 that were invested before the later of the two dates:

(1) the date of transition to IFRS, and

However, if a first-time adopter chooses to apply IFRS 2 to such equity instruments, it can only do so if the entity has disclosed the fair value of those equity instruments as determined at the measurement date in accordance with the requirements of IFRS 2.

For all grants of equity instruments for which IFRS 2 has not been applied (such as equity instruments granted on or before November 7, 2002), an entity applying IFRS for the first time must still disclose the information required by IFRS ) 2.

An entity is not required to apply IFRS 2 if the change occurs before the later of two dates:

(1) the date of transition to IFRS, and

A first-time adopter is encouraged, but not required, to apply IFRS 2 to liabilities arising from share-based payment transactions settled prior to the date of transition to IFRS.

A first-time adopter is also encouraged, but not required, to apply IFRS 2 for liabilities that were settled before 1 January 2005.

Insurance contracts.

A first-time adopter of IFRSs may apply the transitional provisions of IFRS 4. IFRS 4 restricts changes in accounting policies for insurance contracts, including changes made by first-time adopters of IFRSs.

Changes in existing reserves, restoration obligations or similar obligations included in the cost of property, plant and equipment.

IFRIC 1 requires specified changes to add or subtract a provision, recovery obligation or similar liability from the value of the asset to which it is associated; the adjusted depreciable amount of the asset is then depreciated prospectively over its remaining useful life.

An entity applying IFRS for the first time is not required to comply with these requirements for changes in such liabilities that occurred prior to the date of transition to IFRS.

If a first-time adopter uses this exemption, it must:

1. measure the liability at the date of transition to IFRS in accordance with IAS 37;

2. Estimate the amount that would be included in the cost of the underlying asset when the liability first arose by discounting the liability to that date using the best estimate of the risk-adjusted discount rate that would apply to that liability during the coming period;

3. Calculate the depreciation expense for this cost as of the date of transition to IFRS, using the asset's current estimate of useful life and the depreciation policy applied in accordance with IFRS.

A first-time adopter may apply the transitional provisions of IFRIC 4. Accordingly, a first-time adopter may determine whether an agreement in effect at the date of transition to IFRSs provides for a lease, taking into account the facts and circumstances that existed at that date.

The best basis for the fair value of a financial instrument at initial recognition is the transaction price unless:

The fair value of that instrument is justified by comparison with other observable current market transactions for the same instrument (i.e. without modification or “repackaging”): or

An estimation method is applied whose variables include data from observable markets.

The subsequent measurement of the financial asset or financial liability, and the subsequent recognition of gains and losses, shall be in accordance with the requirements of IFRS 1.

Application at initial recognition may result in no gain or loss being recognized on initial recognition of a financial asset or financial liability.

In this case, IAS 39 requires that a gain or loss be recognized after initial recognition only to the extent that it is due to a change in a factor (including time) that market participants would take into account when pricing.

IFRS 1 prohibits the retrospective application of certain provisions of other IFRSs related to:

1. derecognition of financial assets and liabilities;

2. hedging accounting;

3. settlement estimates;

4. assets classified as held for sale and the termination of operations.

Derecognition of financial assets and financial liabilities.

If a first-time adopter of IFRS derecognises non-derivative financial assets or non-derivative financial liabilities in accordance with previously applied GAAP as a result of a transition that occurred prior to 1 January 2004, it shall not recognize those assets and liabilities under IFRS (unless they are not recognized as a result of a later transaction or event).

An entity may apply the derecognition requirements of IAS 39 retrospectively from any date, provided that the necessary information was obtained at the time of initial accounting for these transactions.

hedge accounting.

In accordance with the requirements of IAS 39, at the date of transition to IFRS, an entity must:

1. measure all derivatives at fair value;

2. Eliminate all deferred losses and gains on derivatives that were accounted for in accordance with previous GAAP as if they were assets or liabilities.

An entity shall not include hedge relationships in its opening IFRS balance sheet that do not qualify for hedge accounting under IAS 39.

However, if an entity has designated a net position as a hedged item under previously applicable GAAP, it may designate an individual item within that net position as a hedged item under IFRS, provided that this is done no later than the date of transition to IFRS.

If, prior to the date of transition to IFRSs, an entity accounted for a transaction as a hedge, but that hedge does not qualify for hedge accounting in IAS 39, the entity applies IAS 39 to discontinue hedge accounting.

Transactions prior to the date of transition to IFRSs should not be retrospectively accounted for as hedges.

Estimated estimates.

IFRS estimates at the date of transition to IFRSs should be consistent with estimates made at the same date in accordance with previously applied statutory rules (after adjustments to reflect any differences in accounting policies). The exception is cases where the fact of error can be objectively confirmed.

An entity may receive information after the date of transition to IFRSs about the estimates it has made in accordance with previously applicable GAAP. Under IAS 10, an entity must treat this information in the same way as non-adjusting events after the balance sheet date.

The same method for estimates is also applied to the comparative period presented in the company's first IFRS financial statements. References to the date of transition to IFRS are replaced by references to the end of the comparative period.

Assets classified as held for sale and discontinued operations IFRS 5 requires prospective application to non-current assets (or disposal groups) that qualify for classification as held for sale and to activities that qualify for classification as discontinued operations, after entry into force of IFRS.

IFRS 5 allows the requirements of IFRS 1 to apply to all non-current assets (or disposal groups) that qualify for classification as held for sale and to activities that qualify for classification as discontinued operations after any date prior to the entry into force of IFRSs. effect, provided that the estimates and other information required to apply IFRS 1 were obtained at the time those criteria were initially met.

2 Voluntary exemptions in the preparation of the opening balance sheet on first application of IFRS

The developers of IFRS 1 “First-time Application of International Financial Reporting Standards”, realizing the high labor intensity of work not only when preparing financial statements in accordance with IFRS for the reporting period, but also when recalculating indicators for the previous reporting date, provided for six exceptions in it, which may be approved by the compilers. These exceptions relate to the presentation of information in the financial statements of business combinations, the use in measuring fair value, the compilation of pension plans, the recognition of foreign exchange differences, combined financial instruments, the determination of the date of preparation of IFRS financial statements by subsidiaries.

However, voluntary exceptions can be ignored in whole or in part, and can be used in full as officially established deviations from the generally accepted reporting rules in the international standards system.

In practical work, when deciding on the use of these exceptions, the most fundamental is to take into account the relationship between the costs of reporting under IFRS and the benefits of the reporting organization, the latter of which should exceed the costs. In addition, IFRS 1 states that the use of these standards is prohibited if they result in a change in decisions previously made by the management of the organization on transactions that have already taken place.

The voluntary business combination exemption concerns the use of IAS 22 Business Combinations. If an entity transitions to IFRSs after the date the business combination was recognized, it must account for all subsequent business combinations up to the date of transition to IFRSs. Moreover, IFRS 1 contains a detailed description of the accounting and presentation in the financial statements of information about business combinations. When compiling the opening balance sheet, the company has the right to use one of three options for generating information about the results of work and the property status of organizations that have subsidiaries and associates, as well as firms engaged in joint activities.

The first option is that the company does not recalculate reporting information if transactions with subsidiaries, affiliates, associates, as well as joint activities were made before the date of transition to international standards.

The second proposed option is to provide a breakdown of information on certain types of business combinations in the notes to the financial statements. Under the third most time-consuming option, an entity reporting under IFRS for the first time must report data for all combinations that take place at the reporting date.

The second voluntary exception in the first preparation of financial statements under IFRS is associated with the most difficult and controversial issue of valuation of assets and liabilities in accounting and reporting. The development of IFRS is carried out in the direction of an increasing commitment to the use of fair value to measure the assets and liabilities of companies. In this regard, IFRS 1 refers to the use of either fair value or estimated value for the assessment of fixed assets, intangible assets, and investment property in the reporting.

The standard allows three options for valuing these types of assets. In the first option, the assets must be valued at the cost that is offered as the main or Alternative option in accordance with the norms of the relevant international standard. Thus, according to the provisions of IFRS 16 Property, Plant and Equipment, the main method of valuation is the initial cost less depreciation and impairment losses, and the alternative is the revalued amount, which is the fair value of the fixed asset at the date of revaluation, less depreciation and impairment losses. However, it is possible to combine and use different types of estimates for individual items of fixed assets and their groups.

In accordance with IAS 38 "Intangible Assets" in the financial statements, such assets can be measured at actual cost acquisition or at fair value, which is formed when intangible assets are acquired in exchange for equity instruments of the company. Fair value is based on the market price in an active market, which may be the current bid price, the price of the last similar transaction. Moreover, an active market is understood as such a market where all the following conditions are simultaneously observed simultaneously: the homogeneity of assets sold on the market, the presence of sellers and buyers willing to make a deal, and the availability of prices for the public. In the absence of an active market for an intangible asset, its cost is based on the price that the company can pay in a transaction between independent parties on the basis of full information, as well as on the recent results of sale transactions of similar assets.

The second option for assessing fixed assets, intangible assets and investment property is to use only fair (market) value, which is calculated at the date of the first preparation of financial statements under IFRS. The third option assumes that the company has the right to use the revalued value for asset valuation, if it was calculated before reporting, either on the basis of a price index, or when the revalued value is comparable to the fair (market) value.

The third voluntary exemption that can be used on initial application of IFRS relates to the treatment of employee benefits as cumulative gains and losses on pension payments employees of the company at the date of preparation of the financial statements, and especially the balance sheet.

Rules for reporting information on defined contribution pension plans and pension plans with defined benefit defined by IFRS 19 Employee Benefits. Moreover, the use of pension plans with defined contributions obliges the company to make fixed contributions to a separate fund. Its employees receive pensions in the amount of contributions made by the company and investment income on these contributions. Defined benefit plans are characterized by the fact that the company undertakes to provide compensation to employees in the agreed amount.

According to the standard, when using a defined benefit pension plan, it is necessary to establish a “corridor” and take into account the amount of going beyond the limits set by it. These amounts, representing actuarial gains or losses, then need to be recognized and presented in the balance sheet at the date of first IFRS reporting. The use of the "corridor" method is possible only from the date of the first preparation of such reports, and retrospective application of this method is not required.

The next voluntary exception to the initial application of IFRS relates to the currency translation treatment that results from the acquisition of a subsidiary. When applying the standards for the first time, an entity has the right not to apply the rules for recognizing and reporting exchange differences in accordance with IAS 21 The Effects of Changes in Foreign Exchange Rates.

The adoption of the fourth voluntary exception makes it possible not to show the calculated exchange differences in the financial statements as an integral element of capital and apply it not to some companies, but to all companies acquired by the organization.

In the event of a sale of a company, the amounts of exchange differences are also not shown in the financial statements (in the income statement, statement of changes in equity) and do not affect financial results activities. However, exchange rate differences foreign exchange transactions are recognized and reflected in the financial statements if they arose after the date of the company's transition to reporting under IFRS. The implementation of such an exception makes it possible to reduce the labor intensity of reporting under the new rules.

Reducing the complexity of the transition to IFRS provides for the use in practical work of the fifth voluntary exception in the preparation of financial statements related to the presentation of data on combined financial instruments owned by the company. Financial instruments are those that have signs of equity instruments and financial liabilities. These include bonds convertible into shares. The methodology for their accounting and reporting in the financial statements is presented in IAS 32 “Financial Instruments: Disclosure and Presentation of Information” and IAS 39 “Financial Instruments: Recognition and Measurement”.

During the first reporting under international standards, it is necessary, after considering each of the financial instruments owned by the company, to single out those for which, as of the date of transition to IFRS, their debt component has not been repaid. If a company owns such financial instruments, it may not separate their equity and debt components when reporting under international standards. The sixth voluntary exception, adopted by the company when preparing financial statements, provides the opportunity to use different dates for the transition of subsidiaries to IFRS in relation to the parent company. In practical work, two situations are possible: when the parent company, before the subsidiary (subsidiaries), when preparing financial statements, switches to international standards and vice versa. If the parent company made the transition before the subsidiary, the latter has the option of valuing its assets and liabilities. Such an assessment can be made either using the carrying amount, when the assets and liabilities of the subsidiary are included by the parent company in the consolidated financial statements according to this assessment, or in accordance with a separate assessment methodology presented in IFRS 1. In domestic practice, the assessment option is used assets and liabilities of any organizations at book value. Therefore, when transitioning to IFRS, organizations need to keep in mind that when consolidating financial statements, they will have to carry out the procedure for adjusting the carrying amount. The essence of the adjustment consists in the exclusion from the carrying amount of consolidation adjustments and adjustments calculated and accounted for using the acquisition method.

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