IFRS 1 First-Time Adoption of IFRS 2011: For Accounting Professionals

for Accounting Professionals
IFRS 1 First-time adoption of IFRS 2011
http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng
IFRS 1 First-time adoption of IFRS
IFRS WOR !OO S "# million $o%nloa$e$&

Welcome to IFRS Workbooks' (hese are the latest versions of the legendary workbooks in Russian and English pro$uce$ by ) (*+IS pro,ects- sponsore$ by the European Union ".//)-.//0& an$ le$ by ri!ewaterhouse"oopers. (hey have also appeare$ on the %ebsite of the #inistry of Finan!e of the Russian Federation. (he %orkbooks cover various concepts of IFRS base$ accounting. (hey are inten$e$ to be practical self-instruction ai$s that professional accountants can use to upgra$e their kno%le$ge- un$erstan$ing an$ skills. 1ach %orkbook is a self-stan$ing short course $esigne$ for appro2imately of three hours of stu$y. *lthough the %orkbooks are part of a series- each one is in$epen$ent of the others. 1ach %orkbook is a combination of Information$ E%amples$ Self-&est 'uestions and (nswers . * basic kno%le$ge of accounting is assume$- but if any a$$itional kno%le$ge is re3uire$ this is mentione$ at the beginning of the section. 4aving %ritten the first three e$itions- we want to update them and pro)ide them to you to download* lease tell your friends and !olleagues* Relating to the first three e$itions an$ up$ate$ te2ts- the copyright of the material containe$ in each %orkbook belongs to the 1uropean 5nion an$ accor$ing to its policy may be used free of !harge for any non-!ommer!ial purpose . (he copyright an$ responsibility of later books an$ the up$ates are ours. Our copyright policy is the same as that of the 1uropean 5nion. We %ish to especially thank Eli+abeth (ppra%ine "1uropean 5nion& %ho a$ministere$ these (*+IS pro,ects- Ri!hard ,* -regson "6artner6rice%aterhouse+oopers& %ho le$ the pro,ects an$ all friends at .ankir*Ru for hosting the books. (*+IS pro,ect partners inclu$e$ Rose2perti7a "Russia&- *++* "5 &- *griconsulting "Italy&- F! "Russia&- an$ 1uropean Savings !ank 8roup "!russels&. (he help of hilip /* Smith "e$itor of the thir$ e$ition& an$ (llan -amborg- pro,ect managers an$ Ekaterina 0ekraso)a- 9irector of 6rice%aterhouse+oopers- %ho manage$ the pro$uction of the Russian version ".//:-0& is gratefully ackno%le$ge$. -lyn R* hillips- manager of the first t%o pro,ects conceive$ the i$ea$esigne$ the %orkbooks an$ e$ite$ the first t%o versions. We are prou$ to realise his vision.
Robin ,oy!e
rofessor of the "hair of International .anking and Finan!e Finan!ial Uni)ersity under the -o)ernment of the Russian Federation 1isiting rofessor of the Siberian (!ademy of Finan!e and .anking ;osco%- Russia ./## 5p$ate$

We also recommen$ rea$ing the 6rice%aterhouse+oopers publication:
"20&E0&S
#ain features of IFRS 1 2b4e!ti)e of IFRS 1 6efined terms S!ope 3 5 5 7
(dopting IFRS especially for its comprehensive e2ample.
#ain features of IFRS 1

IFRS # applies to first-time a$opters of IFRS - %hen an un$ertaking a$opts IFRSs for the first time by an e2plicit an$ unreserve$ statement of compliance %ith IFRSs. In general- IFRS # re3uires an un$ertaking to comply %ith each IFRS effective at the reporting $ate for its first IFRS financial statements. In particularIFRS # re3uires an un$ertaking to $o the follo%ing in the opening IFRS balance sheet that it prepares as a starting point for its accounting un$er IFRSs: #. recognise all assets an$ liabilities %hose recognition is re3uire$ by IFRSs= .. not recognise items as assets or liabilities if IFRSs $o not permit such recognition= ). reclassify items that it recognise$ un$er previous 8**6 as one type of asset- liability or component of e3uity- but are a $ifferent type of asset- liability or component of e3uity un$er IFRSs= an$ >. apply IFRSs in measuring all recognise$ assets an$ liabilities. IFRS # grants limite$ e2emptions from these re3uirements in specifie$ areas %here the cost of complying %ith them %oul$ be likely to e2cee$ the benefits to users.
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Re!ognition and measurement ********************************8 E%emptions from other IFRSs ********************************11 Fair )alue or re)aluation as deemed !ost *************12 Fair )alue measurement of finan!ial assets or finan!ial liabilities * * *20 E%!eptions to retrospe!ti)e appli!ation of other IFRSs ************************21 resentation and dis!losure **********************************25 #ultiple !hoi!e 9uestions ( ( 2: (nswers to multiple !hoi!e 9uestions*******************35 E06I; 1 - Interim finan!ial reports *****************3< E06I; 2 - .usiness !ombinations ******************3=
<ote: ;aterial from the follo%ing 6rice%aterhouse+oopers publications has been use$ in this %orkbook: -*pplying IFRS- IFRS <e%s- *ccounting Solutions

IFRS # also prohibits retrospective application of IFRSs in some areas- particularly %here retrospective application %oul$ re3uire ,u$gements by management about past con$itions- after the outcome of a particular transaction is alrea$y kno%n. IFRS # re3uires $isclosures that e2plain ho% the transition from previous 8**6 to IFRSs affecte$ the un$ertaking?s reporte$ financial position- financial performance an$ cash flo%s. *s ne% IFRS stan$ar$s are a$opte$ an$ e2isting stan$ar$s mo$ifie$- the nee$s of first-time a$opters are consi$ere$. Where these $iffer from the nee$s of e2isting users- a$$itions an$ amen$ments are ma$e to IFRS #. IFRS # is therefore sub,ect to continue$ changes. 2b4e!ti)e of IFRS 1 (he ob,ective of IFRS # is to ensure that an un$ertaking?s first IFRS financial statements- an$ its interim financial reports for part of the perio$ covere$ by those financial statements- contain high 3uality information that: #. is transparent for users an$ comparable over all perio$s presente$= .. provi$es a suitable starting point for accounting un$er International Financial Reporting Stan$ar$s "IFRSs&= an$ ). can be generate$ at a cost that $oes not e2cee$ the benefits to users. 6efined terms http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng date of transition to IFRSs (he start of the earliest perio$ for %hich an un$ertaking presents full comparative information un$er IFRSs in its first IFRS financial statements. 1@*;6A1- $ate of transition to IFRSs -# Bou $eci$e to publish IFRS statements for .@@: %ith comparatives for the years .@@)-.@@C. Bour $ate of transition to IFRSs is #st Danuary .@@). E;(# >E -6ate of transition to IFRS * liste$ un$ertaking prepares IFRS consoli$ate$ accounts an$ IFRS parent un$ertaking accounts in .//E. In .//F- they are taken over by an unliste$ un$ertaking an$ no longer have to prepare IFRS accounts. (he ol$ parent is allo%e$ to convert back to 5 8**6 un$er the +ompanies *ct an$ $oes so. In ./#/- the ne% group lists an$ converts all its subsi$iaries to IFRS. If the structure of the group has not change$- can the group apply IFRS # to the IFRS accounts prepare$ in ./#/G FRS # shoul$ be applie$ %hen preparing an un$ertaking?s first IFRS financial statements. IFRS # $efines these as the first annual financial statements in %hich an un$ertaking a$opts IFRSs- by an e2plicit an$ unreserve$ statement of compliance %ith IFRSs. (herefore it %oul$ appear that as such a statement %as ma$e in the .//E accounts- IFRS # shoul$ not be applie$ in the
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consoli$ate$ accounts or the parent un$ertaking accounts in ./#/. 1@*;6A1- first IFRS financial statements 4o%ever- IFRS # states that the stan$ar$ may be applie$ %here the un$ertaking presente$ its most recent previous financial statements un$er national re3uirements that are not consistent %ith IFRSs in all respects. *s the prior year accounts %ere prepare$ un$er 5 8**6- the application of IFRS ) %oul$ allo% the un$ertaking to use IFRS # in preparing the ./#/ financial statements. In light of the inconsistency of the $efinitions %ithin the stan$ar$%e consi$er that the un$ertaking coul$ apply IFRS # to the consoli$ate$ accounts an$ the parent un$ertaking accounts prepare$ in ./#/. deemed !ost *n amount use$ as a surrogate for cost or $epreciate$ cost at a given $ate. Subse3uent $epreciation or amortisation assumes that the un$ertaking ha$ initially recognise$ the asset or liability at the given $ate- an$ that its cost %as e3ual to the $eeme$ cost. fair )alue &he pri!e that would be re!ei)ed to sell an asset$ or paid to transfer a liability$ in an orderly transa!tion between market parti!ipants at the measurement date* ?IFRS 13@ first IFRS finan!ial statements (he first annual financial statements in %hich an un$ertaking a$opts IFRSs- by an e2plicit an$ unreserve$ statement of compliance %ith IFRSs. http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng Bou $eci$e to publish IFRS statements for .@@: %ith comparatives for the years .@@)-.@@C. In them you make an e2plicit an$ unreserve$ statement of compliance %ith IFRSs. Bour first IFRS financial statements are for .@@:. E;(# >E -Re!on!iliations to Russian -(( on first-time IFRS adoption 5n$ertaking 1 previously prepare$ its financial statements un$er Russian 8**6. 9uring .//C- 1 lists on *I; an$ issues a prospectus prepare$ un$er IFRS in connection %ith the transaction inclu$ing financial information from # Danuary .//> on%ar$s. For the purposes of preparing the financial statements for the year en$ing )# 9ecember .//C- %hat is the transition $ateG Shoul$ the financial statements inclu$e the reconciliations re3uire$ by IFRS #. IFRS # is applicable to all un$ertakings? first IFRS financial statements. (he term Hfirst IFRS financial statements? is $efine$ as an un$ertaking?s Hfirst annual financial statements in %hich h an un$ertaking a$opts IFRS by an e2plicit an$ unreserve$ statement of compliance %ith IFRS?. If the prospectus inclu$e$ such a statement- it %ill meet this $efinition an$ the $ate of transition to IFRS for both the
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prospectus an$ the annual financial statements %ill be # Danuary .//>. IFRS # %ill not then strictly apply to the annual financial statements for the year en$ing )# 9ecember .//C. 4o%ever- it %oul$ be sensible if the reconciliations from Russian 8**6 to IFRS $isclose$ in the prospectus are also repro$uce$ in the financial statements to ensure fair presentation to the rea$er of the results an$ financial position of the business. first IFRS reporting period (he reporting perio$ en$ing on the reporting $ate of an un$ertaking?s first IFRS financial statements. 1@*;6A1- first IFRS reporting perio$ Bou $eci$e to publish IFRS statements for .@@: %ith comparatives for the years .@@)-.@@C. In them you make an e2plicit an$ unreserve$ statement of compliance %ith IFRSs. Bour first IFRS reporting perio$ is the year en$ing .@@:. first-time adopter *n un$ertaking that presents its first IFRS financial statements. International Finan!ial Reporting Standards ?IFRSs@ Stan$ar$s an$ Interpretations a$opte$ by the International *ccounting Stan$ar$s !oar$ "I*S!&. (hey comprise: #. International Financial Reporting Stan$ar$s= http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng Bou $eci$e to publish IFRS statements for .@@: %ith comparatives for the years .@@)-.@@C. Bou previously reporte$ accor$ing to Russian *ccounting Stan$ar$s. Russian *ccounting Stan$ar$s are your previous 8**6. reporting date (he en$ of the latest perio$ covere$ by financial statements or by an interim financial report. 1@*;6A1- reporting $ate
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.. International *ccounting Stan$ar$s= an$ ). Interpretations originate$ by the International Financial Reporting Interpretations +ommittee "IFRI+& or the former Stan$ing Interpretations +ommittee "SI+&. opening IFRS balan!e sheet *n un$ertaking?s balance sheet "publishe$ or unpublishe$& at the $ate of transition to IFRSs. 1@*;6A1- opening IFRS balance sheet Bou $eci$e to publish IFRS statements for .@@: %ith comparatives for the years .@@)-.@@C. Bour opening IFRS balance sheet is the balance sheet of # st Danuary .@@). pre)ious -(( (he basis of accounting that a first-time a$opter use$ imme$iately before a$opting IFRSs. 1@*;6A1- previous 8**6

Bou $eci$e to publish IFRS statements for .@@: %ith comparatives for the years .@@)-.@@C. In them you make an e2plicit an$ unreserve$ statement of compliance %ith IFRSs. <o interim financial reports are pro$uce$. Bour first IFRS reporting $ate is the )#st 9ecember .@@:. S!ope *n un$ertaking shall apply IFRS # in: #. its first IFRS financial statements= an$ .. each interim finan!ial report- if any- that it presents un$er I*S )> for part of the perio$ covere$ by its first IFRS financial statements. 1@*;6A1- interim financial report Bou $eci$e to publish IFRS statements for .@@: %ith comparatives for the years .@@)-.@@C. Bou also pro$uce an interim financial report for Danuary to Dune .@@:. In it you make an e2plicit an$ unreserve$ statement of compliance %ith IFRSs. Bou apply IFRS # to your interim financial report. *n un$ertaking?s first IFRS financial statements are the first annual financial statements in %hich the un$ertaking a$opts IFRSs- by an e2plicit an$ unreserve$ statement in those financial statements of compliance %ith IFRSs. Financial statements un$er IFRSs are an un$ertaking?s first IFRS financial statements if- for e2ample- the un$ertaking: #. presente$ its most recent previous financial statements: i. un$er national re3uirements that are not consistent %ith IFRSs in all respects= ii. in conformity %ith IFRSs in all respects- e2cept that the financial statements $i$ not contain an e2plicit an$ unreserve$ statement that they complie$ %ith IFRSs= iii. containing an e2plicit statement of compliance %ith some- but not all- IFRSs= iv. un$er national re3uirements inconsistent %ith IFRSs- using some in$ivi$ual IFRSs to account for items for %hich national re3uirements $i$ not e2ist= or v. un$er national re3uirements- %ith a reconciliation of some amounts to the amounts $etermine$ un$er IFRSs= .. prepare$ financial statements un$er IFRSs for internal use only- %ithout making them available to the un$ertaking?s o%ners or any other e2ternal users= 1@*;6A1- for internal use only Bou $eci$e to publish IFRS statements for .@@: %ith comparatives for the years .@@)-.@@C. In them you make an e2plicit an$ unreserve$ statement of compliance %ith IFRSs. <o interim financial reports are pro$uce$.
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(he .@@)-.@@C figures come from management accounts that ha$ been seen only by your $irectors. Bour first IFRS financial statements are for .@@:. ). prepare$ a reporting package un$er IFRSs for consoli$ation purposes %ithout preparing a complete set of financial statements as $efine$ in I*S #= or >. $i$ not present financial statements for previous perio$s. IFRS # $oes not apply %hen- for e2ample- an un$ertaking: #. stops presenting financial statements un$er national re3uirements- having previously presente$ them as %ell as a secon$ set of financial statements that containe$ an e2plicit an$ unreserve$ statement of compliance %ith IFRSs= .. presente$ financial statements in the previous year un$er national re3uirements an$ those financial statements containe$ an e2plicit an$ unreserve$ statement of compliance %ith IFRSs= or ). presente$ financial statements in the previous year that containe$ an e2plicit an$ unreserve$ statement of compliance %ith IFRSs- even if the au$itors 3ualifie$ their au$it report on those financial statements. 1@*;6A1- 3ualifie$ their au$it report Bou $eci$e to publish IFRS statements for .@@: %ith comparatives for the years .@@)-.@@C. In them you make an e2plicit an$ unreserve$ statement of compliance %ith IFRSs. <o http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng IFRS #$oes not apply to changes in accounting policies ma$e by an un$ertaking that alrea$y applies IFRSs. Such changes are the sub,ect of: #. re3uirements on changes in accounting policies in I*S := an$ .. specific transitional re3uirements in other IFRSs. Re!ognition and measurement 2pening IFRS balan!e sheet ?SF @ *n un$ertaking shall prepare an opening IFRS balance sheet at the $ate of transition to IFRSs. (his is the starting point for its accounting un$er IFRSs. *n un$ertaking nee$ not present its opening IFRS balance sheet in its first IFRS financial statements. (!!ounting poli!ies *n un$ertaking shall use the same accounting policies in its opening IFRS balance sheet an$ throughout all perio$s presente$ in its first IFRS financial statements. (hose accounting
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interim financial reports are pro$uce$. Bou ha$ previously publishe$ your .22C statements- %ith comparatives- but your au$itors ha$ 3ualifie$ them on the basis that $oubts %ere raise$ about %hether the un$ertaking %as a Igoing concernJ. Bour first IFRS reporting $ate %as the )#st 9ecember .@@C. IFRS # $oes not apply to your .@@: statements.

policies shall comply %ith each IFRS effective at the reporting $ate for its first IFRS financial statements. *n un$ertaking shall not apply $ifferent versions of IFRSs that %ere effective at earlier $ates. *n un$ertaking may apply a ne% IFRS that is not yet man$atory if it permits early application. 1@*;6A1- accounting policies Bou $eci$e to publish IFRS statements for .@@: %ith comparatives for the years .@@)-.@@C. In them you make an e2plicit an$ unreserve$ statement of compliance %ith IFRSs. Bour accounting policies for all years shoul$ be those applicable to .@@:. 1@*;6A1: +onsistent application of latest version of IFRSs !ackgroun$ (he reporting $ate for un$ertaking *?s first IFRS financial statements is )# 9ecember .@@E. 5n$ertaking * $eci$es to present comparative information in those financial statements for one year only. (herefore- its $ate of transition to IFRSs is the beginning of business on # Danuary .@@> "or- e3uivalently- close of business on )# 9ecember .@@)&. 5n$ertaking * presente$ financial statements un$er its previous 8**6 annually to )# 9ecember each year up to- an$ inclu$inghttp://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng )# 9ecember .@@>. *pplication of re3uirements 5n$ertaking * is re3uire$ to apply the IFRSs effective for perio$s en$ing on )# 9ecember .@@E in: #. preparing its opening IFRS balance sheet at # Danuary .@@>= an$ .. preparing an$ presenting its balance sheet for )# 9ecember .@@E "inclu$ing comparative amounts for .@@>&- income statement- statement of changes in e3uity an$ cash flo% statement for the year to )# 9ecember .@@E "inclu$ing comparative amounts for .@@>& an$ $isclosures "inclu$ing comparative information for .@@>&. If a ne% IFRS is not yet man$atory but permits early applicationan un$ertaking is permitte$- but not re3uire$- to apply that IFRS in its first IFRS financial statements. (he transitional provisions in other IFRSs apply to changes in accounting policies ma$e by an un$ertaking that alrea$y uses IFRSs= they $o not apply to a first-time a$opter?s transition to IFRSs. *n un$ertaking shall- in its opening IFRS balance sheet: #. recognise all assets an$ liabilities %hose recognition is re3uire$ by IFRSs= .. not recognise items as assets or liabilities if IFRSs $o not
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permit such recognition= ). reclassify items that it recognise$ un$er previous 8**6 as one type of asset- liability or component of e3uity- but are a $ifferent type of asset- liability or component of e3uity un$er IFRSs= an$ >. apply IFRSs in measuring all recognise$ assets an$ liabilities. (he accounting policies that an un$ertaking uses in its opening IFRS balance sheet may $iffer from those that it use$ for the same $ate using its previous 8**6. (he resulting a$,ustments arise from events an$ transactions before the $ate of transition to IFRSs. (herefore- an un$ertaking shall recor$ those a$,ustments $irectly in retaine$ earnings "or- if appropriate- another category of e3uity& at the $ate of transition to IFRSs. 1@*;6A1- resulting a$,ustments arise from events an$ transactions before the $ate of transition to IFRSs 5n$er your previous 8**6- your recognise$ intangible assets that are not recognise$ un$er IFRS. *ny a$,ustment is recor$e$ in retaine$ earnings an$ $isclose$. E;(# >E -Intangibles with indefinite li)es 5n$ertaking 9 is a successful consumer pro$ucts manufacturer. It o%ns an establishe$ bran$ name that it ac3uire$ in ./// at a cost of #Em. http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng 9 has continue$ to gro% the market share of the bran$ since .///. 9?s management are able to $emonstrate through an analysis of all relevant factors that there is no foreseeable limit to the perio$ over %hich the bran$ is e2pecte$ to generate net cash inflo%s for 9. (his assessment %as also ma$e %hen 9 purchase$ the bran$ in .///.9?s management therefore believe that the bran$ has ha$ an in$efinite useful life since .///. 5n$ertaking 9 %ill a$opt IFRS in .//E %ith a transition $ate of # Danuary .//>.9?s previous 8**6 re3uire$ that all intangible assets %ere amortise$ over a ma2imum perio$ of ./ years. (he carrying amount of the bran$ in 9?s previous 8**6 balance sheet at )# 9ecember .//) is therefore #.m "#Em less four years.amortisation&. *t %hat value shoul$ 9 recognise the bran$ in its transition IFRS balance sheetG 9 shoul$ recognise the bran$ at #Em in its transition IFRS balance sheet at # Danuary .//>. (he basic principle in IFRS # is the retrospective application of the IFRS stan$ar$s in force at the reporting $ate- e2cept %here an e2ception- or an e2emption- permits or re3uires other%ise. 9 must measure the bran$ on its transition balance sheet as if it ha$ al%ays accounte$ for it in accor$ance %ith I*S ):. 8ui$ance in IFRS # clarifies that %here useful lives applie$ un$er
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previous 8**6 are not consistent %ith useful lives applie$ un$er IFRS- then the un$ertaking a$,usts the accumulate$ amortisation in the opening IFRS balance sheet retrospectively. E;(# >EA 2pening a!!ounts 5n$ertaking 4 has a 9ecember year en$. It has publishe$ interim financial statements as at )/ Dune .//>. In these statements- the un$ertaking has restate$ the balance sheet to present an investment in o%n shares as a $e$uction in arriving at sharehol$ers? fun$s in accor$ance %ith 5I(F ):-Accounting for ESOP Trusts. When preparing the opening balance sheet reconciliation for inclusion in the first IFRS financial statements- shoul$ this be base$ on the figures inclu$e$ in the financial statements to )# 9ecember .//) as they %ere originally publishe$- or shoul$ they take account of the reclassification of the investment in o%n shares un$er 5I(F ):G IFRS # states that an un$ertaking?s first IFRS financial statements "ie- for year en$e$ )# 9ecember .//E& shoul$ inclu$e reconciliations of e3uity at the $ate of transition to IFRS "# Danuary .//>& an$ a reconciliation for the en$ of the latest perio$ presente$ in the un$ertaking?s most recent annual financial statement un$er previous 8**6 ")# 9ecember .//>&. In pro$ucing these reconciliations the un$ertaking shoul$ use the 9ecember .//) figures as a$,uste$ for the restatement cause$ by 5I(F ):. (his %ill allo% the accounts user to $etermine %hat the http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng $ifferences are that have been cause$ by moving from 5 8**6 to IFRS %hich is the purpose of these reconciliations- rather than also inclu$ing accounting policy changes that have occurre$ un$er 5 8**6. IFRS # establishes t%o categories of e2ceptions to the principle that an un$ertaking?s opening IFRS balance sheet shall comply %ith each IFRS: #. e2emptions from some re3uirements of other IFRSs. .. prohibition of retrospective application of some aspects of other IFRSs. E%emptions from other IFRSs *n un$ertaking may elect to use one or more of the follo%ing e2emptions: #. business combinations= .. fair value or revaluation as $eeme$ cost= ). staff benefits= >. cumulative translation $ifferences= E. compoun$ financial instruments= F. investments in subsi$iaries- associates an$ ,oint ventures= C. $esignation of previously recognise$ financial instruments=
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:. share-base$ payment transactions= 0. insurance contracts= #/. $ecommissioning liabilities inclu$e$ in the cost of propertyplant an$ e3uipment= ##. leases= #. $eeme$ cost. *n un$ertaking shall not apply these e2emptions by analogy to other items. Some e2emptions refer to fair value. IFRS ) !usiness +ombinations e2plains ho% to $etermine the fair values of i$entifiable assets an$ liabilities ac3uire$ in a business combination. *n un$ertaking shall apply those e2planations in $etermining fair values un$er IFRS #- unless another IFRS contains more specific gui$ance on the $etermination of fair values for the asset or liability in 3uestion. (hose fair values shall reflect con$itions that e2iste$ at the $ate for %hich they %ere $etermine$. Fair )alue or re)aluation as deemed !ost In)estments in subsidiaries$ 4ointly-!ontrolled undertakings and asso!iates When an un$ertaking prepares separate financial statementsI*S .C Separate Financial Statements re3uires it to account for its investments in subsi$iaries- ,ointly controlle$ un$ertakings an$ associates either: "a& at cost or "b& in accor$ance %ith IFRS 0 Financial Instruments. If a first-time a$opter measures such an investment at cost- it shall measure that investment at one of the follo%ing amounts in its separate opening IFRS statement of financial position: "a& cost $etermine$ in accor$ance %ith I*S .C or "b& $eeme$ cost. (he $eeme$ cost of such an investment shall be its: "i& fair value "$etermine$ in accor$ance %ith IFRS #)& at the un$ertaking?s $ate of transition to IFRSs in its separate financial statements or "ii& previous 8**6 carrying amount at that $ate. * first-time a$opter may choose either "i& or "ii& above to measure its investment in each subsi$iary- ,ointly controlle$ un$ertaking or associate that it elects to measure using a $eeme$ cost. If an un$ertaking uses a $eeme$ cost in its opening IFRS statement of financial position for an investment in a subsi$iary,ointly-controlle$ un$ertaking or associate in its separate financial
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statements- the un$ertaking?s first IFRS separate financial statements shall $isclose: "a& the aggregate $eeme$ cost of those investments for %hich $eeme$ cost is their previous 8**6 carrying amount= "b& the aggregate $eeme$ cost of those investments for %hich $eeme$ cost is fair value= an$ "c& the aggregate a$,ustment to the carrying amounts reporte$ un$er previous 8**6. 5n$er your previous 8**6- you revalue$ your property using an in$epen$ent valuation. Bou have been a$vise$ that the values have not materially change$ at the $ate of transition to IFRSs. Bou may use these valuations as $eeme$ cost un$er IFRS. (hese elections in are also available for: #. investment property- if an un$ertaking elects to use the cost mo$el in I*S >/ Investment 6roperty= an$ .. intangible assets that meet: roperty$ plant and e9uipment *n un$ertaking may elect to measure an item of propertyplant an$ e3uipment at the date of transition to IFRSs at its fair value- an$ use that fair )alue as its deemed !ost at that date . * first-time a$opter may elect to use a previous 8**6 revaluation of an item of propertyplant an$ e3uipment at- or before- the $ate of transition to IFRSs as $eeme$ cost at the $ate of the revaluation- if the revaluation %as- at the $ate of the revaluation- broa$ly comparable to: #. fair value= or .. cost- or $epreciate$ cost- un$er IFRSs- a$,uste$ to reflect- for e2ample- changes in a general- or specific price in$e2. 1@*;6A1- fair value un$er previous 8**6 -# http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng i. the recognition criteria in I*S ): Intangible *ssets "inclu$ing reliable measurement of original cost&= an$ ii. the criteria in I*S ): for revaluation "inclu$ing the e2istence of an active market&. *n un$ertaking shall not use these elections for other assets- or for liabilities. * first-time a$opter may have establishe$ a $eeme$ cost un$er previous 8**6 for some or all of its assets an$ liabilities by measuring them at their fair value at one particular $ate $ue to an event such as a privatisation- or initial public offering. 1@*;6A1- fair value un$er previous 8**6 -. 5n$er your previous 8**6- you revalue$ various assets using an in$epen$ent valuation- imme$iately prior to a listing on the stock e2change.
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Bou have been a$vise$ that the values have not materially change$ at the $ate of transition to IFRSs. Bou may use these valuations as $eeme$ cost un$er IFRS. It may use such event-$riven fair value measurements as $eeme$ cost for IFRSs at the $ate of that measurement. .. on $isposal of a foreign operation- to transfer the cumulative translation $ifference for that foreign operation "inclu$ing- if applicable- gains an$ losses on relate$ he$ges& to the income statement as part of the gain or loss on $isposal. 4o%ever- a first-time a$opter nee$ not comply %ith these re3uirements for cumulative translation $ifferences that e2iste$ at the $ate of transition to IFRSs. If a first-time a$opter uses this e2emption: #. the cumulative translation $ifferences for all foreign operations are $eeme$ to be 7ero at the $ate of transition to IFRSs= an$ .. the gain or loss on a subse3uent $isposal of any foreign operation shall e2clu$e translation $ifferences that arose before the $ate of transition to IFRSs- but shall inclu$e later translation $ifferences. "ompound finan!ial instruments ?see I(S 32 B I(S 32C3: workbook 1 D Initial Re!ognition@ I*S ). re3uires an un$ertaking to split a compoun$ financial instrument at inception into separate liability an$ e3uity components. If the liability component is no longer outstan$ingretrospective application of I*S ). involves separating t%o portions of e3uity. (he first portion is in retaine$ earnings an$ represents the cumulative interest accrete$ on the liability component. (he other portion represents the original e3uity component. 4o%ever- un$er IFRS #- a first-time a$opter nee$ not separate these t%o portions if the liability component is no longer outstan$ing at the $ate of transition to IFRSs.
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Staff benefits ?see I(S 1: workbook@ * first-time a$opter may elect to recognise all cumulative actuarial gains an$ losses at the $ate of transition to IFRSs. If a first-time a$opter uses this election- it shall apply it to all plans. *n un$ertaking may $isclose the amounts as the amounts are $etermine$ for each accounting perio$ prospectively from the transition $ate. "umulati)e translation differen!es ?see I(S 21 workbook@ I*S .# re3uires an un$ertaking: #. to classify some translation $ifferences as a separate component of e3uity= an$

(ssets and liabilities of subsidiaries$ asso!iates and 4oint )entures If a subsi$iary becomes a first-time a$opter later than its parentthe subsi$iary shall measure its assets an$ liabilities at either: #. the carrying amounts that %oul$ be inclu$e$ in the parent?s consoli$ate$ financial statements- base$ on the parent?s $ate of transition to IFRSs- if no a$,ustments %ere ma$e for consoli$ation proce$ures an$ for the effects of the business combination in %hich the parent ac3uire$ the subsi$iary= or .. the carrying amounts re3uire$ by the rest of IFRS #- base$ on the subsi$iary?s $ate of transition to IFRSs. (hese carrying amounts coul$ $iffer from those $escribe$ in "#&: i. %hen the e2emptions in IFRS # result in measurements that $epen$ on the $ate of transition to IFRSs. ii. %hen the accounting policies use$ in the subsi$iary?s financial statements $iffer from those in the consoli$ate$ financial statements. 1@*;6A1 - policies use$ in the subsi$iary?s financial statements $iffer from those in the consoli$ate$ financial statements * subsi$iary may use as its accounting policy the cost mo$el in I*S #F 6roperty- 6lant an$ 13uipment- %hereas the group may use the revaluation mo$el. Subsidiary transitioning 5n$ertaking * has reporte$ un$er IFRS since #00/. 5n$ertaking * ac3uire$ un$ertaking ! in .//). ! %ill transition from its http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng national 8**6 to IFRS in .//E- %ith a transition $ate of # Danuary .//>- an$ %ill prepare consoli$ate$ financial statements for its sub-group. 5n$ertaking ! ac3uire$ a subsi$iary- un$ertaking +- in ./// an$ applie$ its previous 8**6 business combinations accounting to that ac3uisition. When ! ac3uire$ + it recognise$ goo$%ill of :-/// an$ an intangible asset of E-/// un$er its previous 8**6 for +?s market share. It also recognise$ a $eferre$ ta2 liability of #-E// in respect of the market share intangible. ! amortises goo$%ill over ./ years un$er previous 8**6 but $oes not amortise the market share intangible. (he intangible asset $oes not 3ualify for recognition un$er IFRS an$ %oul$ have been subsume$ %ithin goo$%ill un$er IFRS )Business Combinations. 5n$ertaking * $erecognise$ the market share intangible %hen it ac3uire$ !. 5n$ertaking ! inten$s to use the subsi$iary transition e2emption in IFRS #. %hich allo%s a subsi$iary to transition to IFRS using the IFRS results that it alrea$y reports to its parent "un$ertaking *&. 4o% $oes this affect the market share intangibleG (he corporate structure an$ key information is summarise$ as follo%s. * 12isting IFRS reporter
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* ac3uire$ ! in .//) ! (ransitions to IFRS in .//E ! ac3uire$ + in ./// + +ontinuing national 8**6 preparer ! shoul$ $e-recognise the market share intangible at # Danuary .//> an$ the relate$ $eferre$ ta2 liability. ! %ill therefore increase the goo$%ill to 0-0// "F->// K E-/// #-E//& at # Danuary .//>. (he subsi$iary transition e2emption is applie$ as: - the results for un$ertaking !?s sub-group at # Danuary .//>- as reporte$ to * - less consoli$ation a$,ustments - less the a$,ustment ma$e by * on ac3uisition of !. (he result of applying only these a$,ustments %oul$ be the inclusion in !?s transition balance sheet of the previous 8**6 market share intangible asset at E-///- an$ goo$%ill of F->// ":-/// less four years? amortisation&. *pplication of the subsi$iary transition e2emption $oes not overri$e the re3uirement to apply the business combinations e2emption in IFRS #. http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng (he a$,uste$ goo$%ill balance of 0-0// is teste$ for impairment at transition $ate. It %ill also be teste$ annually thereafter an$ %henever in$icators of impairment are i$entifie$. ). * similar election is available to an associate or ,oint venture that becomes a first-time a$opter later than an un$ertaking that has significant influence or ,oint control over it. 4o%ever- if an un$ertaking becomes a first-time a$opter later than its subsi$iary "or associate or ,oint venture& the un$ertaking shall measure the assets an$ liabilities of the subsi$iary "or associate or ,oint venture& at the same carrying amounts as the subsi$iary "or associate or ,oint venture&e2cept for consoli$ation a$,ustments. 1@*;6A1 - un$ertaking becomes a first-time a$opter later than its subsi$iary In .@@C- your subsi$iary became a first-time a$opter of IFRS. In .@@:- your un$ertaking becomes a first-time a$opter of IFRS. Bou use the same carrying amounts of assets an$ liabilities as the subsi$iary uses "in .@@:&- e2cept for consoli$ation a$,ustments- to pro$uce your consoli$ate$ statements. !?s management must therefore apply the business combinations e2emption to the market share intangible. It %ill therefore $e-recognise the market share intangible at # Danuary .//> an$ the relate$ $eferre$ ta2 liability.
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Similarly- if a parent becomes a first-time a$opter for its separate financial statements earlier or later than for its consoli$ate$ financial statements- it shall measure its assets an$ liabilities at the same amounts in both financial statements- e2cept for consoli$ation a$,ustments. 6esignation of pre)iously re!ognised finan!ial instruments ?see IFRS : B I(S 32C3: workbook 1 D Initial Re!ognition@ #. *n un$ertaking that presents its first IFRS financial statements is permitte$ to $esignate- at the $ate of transition to IFRSs- any financial asset or financial liability as at fair value through profit or loss provi$e$ the asset or liability meets the criteria of IFRS 0 at that $ate. .. *n un$ertaking that presents its first IFRS financial statements for an annual perio$ beginning on or after # Danuary .//F an$ before # September .//FLsuch an un$ertaking is permitte$ to $esignate- at the $ate of transition to IFRSs- any financial asset or financial liability as at fair value through profit or loss provi$e$ the asset or liability meets the criteria of I*S )0 at that $ate. ). If the un$ertaking restates comparative information for IFRS 0 it shall restate that information for the financial assets- financial liabilities- or group of financial assets- financial liabilities or both$esignate$ at the start of its first IFRS reporting perio$. Such restatement of comparative information shall be ma$e only if the $esignate$ items or groups %oul$ have met the criteria for such $esignation at the $ate of transition to IFRSs or- if ac3uire$ after the $ate of transition to IFRSs- %oul$ have met the criteria in IFRS 0 at the $ate of initial recognition. http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng >. for an un$ertaking that presents its first IFRS financial statements for an annual perio$ beginning before # September .//FLany financial assets an$ financial liabilities such an un$ertaking $esignate$ as at fair value through profit or loss that %ere previously $esignate$ as the he$ge$ item in fair value he$ge accounting relationships shall be $e-$esignate$ from those relationships at the same time they are $esignate$ as at fair value through profit or loss. If it is impracticable for an un$ertaking to apply retrospectively the effective interest metho$- or the impairment re3uirements of I*S )0- the fair value of the financial asset at the $ate of transition to IFRSs shall be the ne% amortise$ cost of that financial asset at the $ate of transition to IFRSs. E%emption from the re9uirement to restate !omparati)e information for IFRS : In its first IFRS financial statements- an un$ertaking that "a& a$opts IFRSs for annual perio$s beginning before # Danuary ./#. an$ "b& applies IFRS 0 shall present at least one year of comparative information. 4o%ever- this comparative information nee$ not comply %ith IFRS C Financial Instruments: 9isclosures or IFRS 0- to the e2tent that the $isclosures re3uire$ by IFRS C relate to items %ithin the scope of IFRS 0. For such entitiesreferences to the M$ate of transition to IFRSsM shall mean- in the case of IFRS C an$ IFRS 0 only- the beginning of the first IFRS reporting perio$. 6is!losures about finan!ial instruments * first-time a$opter may apply the transition provisions in IFRS C.
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Share-based payment transa!tions ?see IFRS 2 workbook@ * first-time a$opter is encourage$- but not re3uire$- to apply IFRS . to e3uity instruments that %ere grante$ after C <ovember .//. that veste$ before the later of "#& the $ate of transition to IFRSs an$ ".& # Danuary .//E. 4o%ever- if a first-time a$opter elects to apply IFRS . to such e3uity instruments- it may $o so only if the un$ertaking has $isclose$ publicly the fair value of those e3uity instruments$etermine$ at the measurement $ate- as $efine$ in IFRS .. For all grants of e3uity instruments to %hich IFRS . has not been applie$ "such as e3uity instruments grante$ on or before C <ovember .//.&- a first-time a$opter shall nevertheless $isclose the information re3uire$ IFRS .. (he un$ertaking is not re3uire$ to apply IFRS . if a mo$ification occurre$ before the later of "#& the $ate of transition to IFRSs an$ ".& # Danuary .//E. * first-time a$opter is encourage$- but not re3uire$- to apply IFRS . to liabilities arising from share-base$ payment transactions that %ere settle$ before the $ate of transition to IFRSs. Insuran!e !ontra!ts ?see IFRS 5 workbook@ http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng
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* first-time a$opter may apply the transitional provisions in IFRS >. IFRS > restricts changes in accounting policies for insurance contracts- inclu$ing changes ma$e by a first-time a$opter. "hanges in e%isting de!ommissioning$ restoration and similar liabilities in!luded in the !ost of property$ plant and e9uipment ?see I(S 1= and I(S 37 workbooks@ IFRI+ # re3uires specifie$ changes in a $ecommissioningrestoration or similar liability to be a$$e$ to- or $e$ucte$ fromthe cost of the asset to %hich it relates= the a$,uste$ $epreciable amount of the asset is then $epreciate$ prospectively over its remaining useful life. * first-time a$opter nee$ not comply %ith these re3uirements for changes in such liabilities that occurre$ before the $ate of transition to IFRSs. If a first-time a$opter uses this e2emption- it shall: #. measure the liability as at the $ate of transition to IFRSs in accor$ance %ith I*S )C= .. estimate the amount that %oul$ have been inclu$e$ in the cost of the relate$ asset %hen the liability first arose- by $iscounting the liability to that $ate- using its best estimate of the historical risk-a$,uste$ $iscount rate"s& that %oul$ have applie$ for that liability over the intervening perio$= an$ ). calculate the accumulate$ $epreciation on that amount- as at the $ate of transition to IFRSs- using the current estimate of the

useful life of the asset- an$ the $epreciation policy a$opte$ un$er IFRSs. I(S 1= !omponent approa!h - Eow far to go - IFRS 0ews ,uly 2005 /e !onsider the !omponent approa!h re9uired by I(S 1= for the re!ognition and depre!iation of property$ plant and e9uipment ? E@* (he component approach re3uires each element of a larger item of 661 %ith a cost significant to the total cost to be separately i$entifie$ an$ $epreciate$ "the Hcomponent re3uirement?&. Once components have been i$entifie$ an$ useful lives establishe$- salvage values must be $etermine$ an$ $epreciation metho$s chosen. If some of the separate elements have similar useful lives- they can be groupe$ for $epreciation purposes. (here is no e2emption in IFRS # for first-time a$opters. +ompanies in many in$ustries %ill be challenge$ by this re3uirement as they a$opt IFRS - often for very $ifferent reasons. (he stan$ar$ uses an aircraft as the e2ample of an asset that nee$s to be componentise$. (his is an e2ample that is intuitively un$erstoo$ an$ simple to account for. (he aircraft bo$y "air frame& an$ the engines are most often ac3uire$ from $ifferent manufacturers an$ have $ifferent maintenance re3uirements. (he useful life of an aircraft engine is much shorter than the life of the airframe. 1ngines must be regularly replace$ to meet air-%orthiness http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng criteria. (he separate elements of cost at ac3uisition are apparent an$ can be use$ to allocate historical cost or fair value at the $ate of transition to IFRS. (he separate i$entification of the engines as a component enables them to be $epreciate$ over their useful life. (he cost is then $epreciate$ to nil or salvage value at the $ate of replacement. (he remaining cost of the component is $erecognise$ an$ the replacement components? cost capitalise$ %hen the ne% engines are installe$. Of course- real life for most preparers is not as straightfor%ar$ as the accounting stan$ar$s might imply. ;anagement of a privatise$ utility- such as an urban %ater an$ se%age net%ork%ill have a much larger task on their han$s. *ny retail $istribution net%ork for a Hutility?- such as %aterpo%er or lan$line telecommunications- %ill present a similar set of challenges. ;any %ill have been foun$e$ an$ o%ne$ by government - often for $eca$es. (he net%ork %ill self-evi$ently provi$e service "put %ater in- turn the tap- get %ater out&. (he $etails of the system in bet%een may literally be burie$ un$ergroun$- %ith $ocumentation of cost an$ elements lost in the mists of time. (he recor$ may be further mu$$ie$ by the privatisation itself - %ith a lump sum fair value being assigne$ to net%ork assets. (he company might have little practice of $istinguishing bet%een maintenance an$ enhancements or replacements that nee$ to be capitalise$. 4o% can management practically apply the re3uirements of I*S #F in these circumstancesG * practical approach %ill involve the company?s engineers an$ operational personnel as
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%ell as accounting an$ finance staff. (he elements of the system shoul$ be analyse$ - looking first at the ma,or elements of the system- especially those that have high-value machinery associate$ %ith them. For e2ample- a %ater company might i$entify the treatment facilities for se%age- ma,or pumping stations- large a3ue$ucts an$ reservoirs. ;achinery sche$ule$ for replacement or removal from service for refit is a goo$ in$icator of separate components. * company?s long-term capital bu$get can be a goo$ source of $ata for this e2ercise. Follo%ing this e2ercise- management might look to fin$ similar groups of assets that can be combine$ for $epreciation purposes. (his might be groups of similar high-voltage lines in an electricity transmission gri$ or an e2ten$e$ gas pipeline net%ork %ith pipes of similar $imensions an$ age. 1ach i$entifie$ component "asset or group of similar assets& is then assigne$ a $epreciation metho$ an$ an economic useful life- inclu$ing consi$eration of technological obsolescence. (he search for components coul$ be carrie$ $o%n to the level of the pipe fittings an$ fi2tures. 4o%ever- I*S #F $oes not seem to re3uire this level of $etail for most companies. (he cost benefit of fin$ing an$ maintaining that level of $etaile$ information may not make it a %orth%hile e2ercise. ;anagement of most affecte$ companies %ill fin$ themselves bet%een the t%o e2tremes of challenge. 4o%ever- the re3uirements of the stan$ar$ %ill bring most capital-intensive preparers %ithin its scope. * fe% other e2amples of substantial fi2e$ assets that %ill http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng re3uire component analysis are gas pipeline systems "compressors&- steel mills "furnaces&- ships "engines an$ refits&- oil an$ chemical refineries "corrosive chemicals& an$ specialise$ factory buil$ings "clean rooms&. IFRS 1 will re9uire a Fpro4e!t-typeG e%er!ise for first-time adopters that ha)e not been using !omponents* #anagement also will need to ensure that the finan!ial a!!ounting and internal !ontrol systems properly a!!ount for newly a!9uired assets as well as tra!king the depre!iation of all identified !omponents* >eases ?see I(S 17 workbook@ * first-time a$opter may apply the transitional provisions in IFRI+ >. (herefore- a first-time a$opter may $etermine %hether an arrangement e2isting at the $ate of transition to IFRSs contains a lease on the basis of facts an$ circumstances e2isting at that $ate. Fair )alue measurement of finan!ial assets or finan!ial liabilities (he best evi$ence of the fair value of a financial instrument at initial recognition is the transaction price unless: the fair value of that instrument is evi$ence$ by comparison %ith other observable current market transactions in the same instrument "ie %ithout mo$ification or repackaging& or base$ on a valuation techni3ue %hose variables inclu$e only $ata from observable markets.
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(he subse3uent measurement of the financial asset or financial liability an$ the subse3uent recognition of gains an$ losses shall be consistent %ith the re3uirements of IFRS #. (he application at initial recognition may result in no gain or loss being recognise$ on the initial recognition of a financial asset or financial liability. In such a case- IFRS 0 re3uires that a gain or loss shall be recognise$ after initial recognition only to the e2tent that it arises from a change in a factor "inclu$ing time& that market participants %oul$ consi$er in setting a price. E%!eptions to retrospe!ti)e appli!ation of other IFRSs IFRS # prohibits retrospective application of some aspects of other IFRSs relating to: #. $erecognition of financial assets an$ financial liabilities= .. he$ge accounting= ). non-controlling interests= >. classification an$ measurement of financial assets= an$ E. embe$$e$ $erivatives. If a first-time a$opter $erecognise$ non-$erivative financial assets or non-$erivative financial liabilities un$er its previous 8**6- it shall not recognise those assets an$ liabilities un$er IFRSs "unless they 3ualify for recognition as a result of a later transaction or event&. *n un$ertaking may apply the $erecognition re3uirements in IFRS 0 retrospectively from any $ate- provi$e$ that the information nee$e$ %as obtaine$ at the time of initially accounting for those transactions. Eedge a!!ounting ?see I(S 32C3: workbook 5 D Eedge (!!ounting@ *s re3uire$ by I*S )0- at the $ate of transition to IFRSs- an un$ertaking shall: #. measure all $erivatives at fair value= an$ .. eliminate all $eferre$ losses an$ gains arising on $erivatives that %ere reporte$ un$er previous 8**6 as if they %ere assets or liabilities. *n un$ertaking shall not reflect in its opening IFRS balance sheet a he$ging relationship that $oes not 3ualify for he$ge accounting un$er I*S )0 1@*;6A1 N non-3ualifying he$ging relationships un$er I*S )0 In your portfolio you have he$ging relationships: 6ere!ognition of finan!ial assets and finan!ial liabilities ?see IFRS : B I(S 32C3: workbook 2 D 6ere!ognition@ http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng -%here the he$ging instrument is a cash instrument or %ritten
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option= -%here the he$ge$ item is a net position= an$ -%here the he$ge covers interest risk in a hel$-to-maturity investment&. (hese $o not 3ualify as he$ging relationships un$er I*S )0. 4o%ever- if an un$ertaking $esignate$ a net position as a he$ge$ item un$er previous 8**6- it may $esignate an in$ivi$ual item %ithin that net position as a he$ge$ item un$er IFRSs- provi$e$ that it $oes so no later than the $ate of transition to IFRSs. If- before the $ate of transition to IFRSs- an un$ertaking ha$ $esignate$ a transaction as a he$ge but the he$ge $oes not meet the con$itions for he$ge accounting in I*S )0- the un$ertaking applies I*S )0 to $iscontinue he$ge accounting. (ransactions entere$ into before the $ate of transition to IFRSs shall not be retrospectively $esignate$ as he$ges. 1@*;6A1 N retrospectively $esignate$ as he$ges Bour $ate of transition to IFRSs is #st Danuary .@@). In .@@.- you $i$ not $ocument any he$ging relationships- but consi$ere$ them to be he$ges for operational purposes. (hese relationships cannot be retrospectively $ocumente$ as he$ges- an$ therefore they $o not 3ualify as he$ging relationships un$er I*S )0. http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng 0on-!ontrolling interests * first-time a$opter shall apply the follo%ing re3uirements of IFRS #/ prospectively from the $ate of transition to IFRSs: "a& the re3uirement that total comprehensive income is attribute$ to the o%ners of the parent an$ to the noncontrolling interests- even if this results in the non-controlling interests having a $eficit balance= "b& the re3uirements for accounting for changes in the parentMs o%nership interest in a subsi$iary that $o not result in a loss of control= an$ "c& the re3uirements for accounting for a loss of control over a subsi$iary- an$ the relate$ re3uirements of IFRS E. If a first-time a$opter elects to apply IFRS ) retrospectively to past business combinations- it also shall apply IFRS #/. +lassification an$ measurement of financial assets *n un$ertaking shall assess %hether a financial asset meets the con$itions in IFRS 0 on the basis of the facts an$ circumstances that e2ist at the $ate of transition to IFRSs. Embedded deri)ati)es * first-time a$opter shall assess %hether an embe$$e$ $erivative is re3uire$ to be separate$ from the host contract an$ accounte$ for as a $erivative on the basis of the con$itions that e2iste$ at the later of the $ate it first became a party to the contract an$ the $ate a reassessment is re3uire$ by of IFRS 0.
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Estimates ?see I(S 8 and I(S 10 workbooks@ 1stimates un$er IFRSs at the $ate of transition to IFRSs shall be consistent %ith estimates ma$e for the same $ate un$er previous 8**6 "after a$,ustments to reflect any $ifference in accounting policies&- unless there is ob,ective evi$ence that those estimates %ere in error. *n un$ertaking may receive information after the $ate of transition to IFRSs about estimates that it ha$ ma$e un$er previous 8**6. *n un$ertaking shall treat that information in the same %ay as non-a$,usting events after the balance sheet $ate un$er I*S #/. 1@*;6A1 - revision of estimates *n un$ertaking?s $ate of transition to IFRSs is # Danuary .@@> an$ ne% information on #E Duly .@@> re3uires the revision of a ba$ $ebt provision estimate ma$e un$er previous 8**6 at )# 9ecember .@@). (he un$ertaking shall not reflect that ne% information in its opening IFRS balance sheet "unless the estimates nee$ a$,ustment for any $ifferences in accounting policies- or there is ob,ective evi$ence that the estimates %ere in error&. Instea$- the un$ertaking shall reflect that ne% information in its income statement "or- if appropriate- other changes in e3uity& for the year en$e$ )# 9ecember .@@>. *n un$ertaking may nee$ to make estimates un$er IFRSs at the $ate of transition to IFRSs that %ere not re3uire$ at that $ate un$er previous 8**6. http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng (o achieve consistency %ith I*S #/- those estimates un$er IFRSs shall reflect con$itions that e2iste$ at the $ate of transition to IFRSs. In particular- estimates of market prices- interest rates or foreign e2change rates shall reflect market con$itions at that $ate. (he same approach to estimates also applies to a comparative perio$ presente$ in an un$ertaking?s first IFRS financial statements. References to the $ate of transition to IFRSs are replace$ by references to the en$ of that comparative perio$. (ssets !lassified as held for sale and dis!ontinued operations "see IFRS < workbook@ IFRS E re3uires that it shall be applie$ prospectively to noncurrent assets "or $isposal groups& that meet the criteria to be classifie$ as hel$ for sale an$ operations that meet the criteria to be classifie$ as $iscontinue$ after the effective $ate of the IFRS. IFRS E permits the application of the re3uirements of IFRS # to all non-current assets "or $isposal groups& that meet the criteria to be classifie$ as hel$ for sale an$ operations that meet the criteria to be classifie$ as $iscontinue$ after any $ate before the effective $ate of the IFRS- provi$e$ the valuations an$ other information nee$e$ to apply IFRS # %ere obtaine$ at the time those criteria %ere originally met. 1@*;6A1 N *ssets classifie$ as hel$ for sale an$ $iscontinue$ operations
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Bour $ate of transition to IFRSs is #st Danuary .@@). Bou have assets classifie$ as hel$ for sale an$ $iscontinue$ operations that %ere recognise$ an$ value$ un$er your previous 8**6. (hese 3ualify as the valuations an$ other information nee$e$ to apply IFRS # %ere obtaine$ at the time of the classification. resentation and dis!losure IFRS # $oes not provi$e e2emptions from the presentation an$ $isclosure re3uirements in other IFRSs. "omparati)e information (o comply %ith I*S # 6resentation of Financial Statements- an un$ertaking?s first IFRS financial statements shall inclu$e at least three statements of financial position- t%o statements of comprehensive income- t%o separate income statements "if presente$&- t%o statements of cash flo%s an$ t%o statements of changes in e3uity an$ relate$ notes- inclu$ing comparative information. E%emption from the re9uirement to restate !omparati)e information for I(S 3: and IFRS 5 In its first IFRS financial statements- an un$ertaking that a$opts IFRSs before # Danuary .//F shall present at least one year of comparative information- but this comparative information nee$ not comply %ith I*S ).- I*S )0 or IFRS >. http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng *n un$ertaking that chooses to present comparative information that $oes not comply %ith I*S ).- I*S )0 or IFRS > in its first year of transition shall: #. apply the recognition an$ measurement re3uirements of its previous 8**6 in the comparative information for financial instruments %ithin the scope of I*S ). an$ I*S )0 an$ for insurance contracts %ithin the scope of IFRS >= .. $isclose this fact together %ith the basis use$ to prepare this information= an$ ). $isclose the nature of the main a$,ustments that %oul$ make the information comply %ith I*S ).- I*S )0 an$ IFRS >. (he un$ertaking nee$ not 3uantify those a$,ustments. 4o%ever- the un$ertaking shall treat any a$,ustment bet%een the balance sheets: at the comparative perio$?s reporting $ate "ie the balance sheet that inclu$es comparative information un$er previous 8**6& an$ at the start of the first IFRS reporting perio$ "ie the first perio$ that inclu$es information that complies %ith I*S ).I*S )0 an$ IFRS >&
as arising from a change in accounting policy an$ give the $isclosures re3uire$ by I*S : *ccounting. In the case of an un$ertaking that chooses to present comparative information that $oes not comply %ith I*S ).- I*S )0 an$ IFRS >- references to the H$ate of transition to IFRSs?
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shall mean- in the case of those Stan$ar$s only- the beginning of the first IFRS reporting perio$. 6esignation of finan!ial assets or finan!ial liabilities *n un$ertaking is permitte$ to $esignate a previously-recognise$ financial asset or financial liability as a financial asset or financial liability at fair value through profit- or loss or a financial asset as available for sale. (he un$ertaking shall $isclose the fair value of financial assetsor financial liabilities- $esignate$ into each category at the $ate of $esignation an$ their classification an$ carrying amount in the previous financial statements. E%emption from the re9uirement to present !omparati)e information for IFRS = "see IFRS = workbook@ *n un$ertaking that a$opts IFRSs before # Danuary .//F an$ chooses to a$opt IFRS F 12ploration for an$ 1valuation of ;ineral Resources before # Danuary .//F nee$ not apply the re3uirements of IFRS F to comparative information presente$ in its first IFRS financial statements. E%emption from the re9uirement to pro)ide !omparati)e dis!losures for IFRS 7 "see IFRS 7 workbook@ *n un$ertaking that a$opts IFRSs before # Danuary .//F an$ chooses to a$opt IFRS C Financial Instruments: 9isclosures in its first IFRS financial statements nee$ not present the comparative $isclosures re3uire$ by IFRS C in those financial statements. Eistori!al summaries IFRS 7 for a first-time adopter
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1@*;6A1- $ate of transition to IFRSs -. Bou $eci$e to publish IFRS statements for .@@: %ith comparatives for the years .@@)-.@@C. Bour comparative information $oes not comply %ith I*S ).- I*S )0 an$ IFRS >. Bour $ate of transition to IFRSs is #st Danuary .@@)- but #st Danuary .@@: for information provi$e$ un$er I*S ).- I*S )0 an$ IFRS >. Such un$ertakings are re3uire$ to comply to provi$e a$$itional $isclosures %hen compliance %ith the specific re3uirements in IFRSs is insufficient to enable users to un$erstan$ the impact of particular transactions- other events an$ con$itions on the un$ertaking?s financial position an$ financial performance. Use of fair )alue as deemed !ost If an un$ertaking uses fair value in its opening IFRS balance sheet as $eeme$ cost for an item of propertyplant an$ e3uipment- an investment property or an intangible asset- the un$ertaking?s first IFRS financial statements shall $isclose- for each line item in the opening IFRS balance sheet: #. the aggregate of those fair values= an$ .. the aggregate a$,ustment to the carrying amounts reporte$ un$er previous 8**6. http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng

5n$ertaking * %ill transition to International Financial Reporting Stan$ar$s "IFRS& from its previous 8**6 for the year en$ing )# 9ecember .//C. It %ill present t%o years of comparative information so its $ate of transition %ill be # Danuary .//E. IFRS C is applicable for annual perio$s beginning on or after # Danuary .//C an$ so un$ertaking * %ill nee$ to apply IFRS C to its first IFRS financial statements. IFRS # provi$es relief for companies that a$opt IFRS before # Danuary .//F. (his relief e2empts a first-time a$opter from presenting the comparative $isclosures re3uire$ by IFRS C in its first IFRS financial statements. +an * apply the e2emption an$ not provi$e the IFRS C $isclosures for .//E or .//FG <o- un$ertaking * must provi$e IFRS C $isclosures for all perio$s presente$- inclu$ing .//E an$ .//F. (he e2emption only applies to first-time a$opters %hose $ate of a$option is before # Danuary .//F an$ %ho choose to early a$opt IFRS C. 5n$ertaking *?s $ate of a$option of IFRS is # Danuary .//C. It therefore $oes not 3ualify for the e2emption. Some un$ertakings present historical summaries of selecte$ $ata for perio$s before the first perio$ for %hich they present full comparative information un$er IFRSs or comparative information un$er previous 8**6 as %ell as the comparative information re3uire$ by I*S #. http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng IFRS # $oes not re3uire such summaries to comply %ith the recognition an$ measurement re3uirements of IFRSs. In any financial statements containing historical summaries or comparative information un$er previous 8**6- an un$ertaking shall: #. label the previous 8**6 information prominently as not being prepare$ un$er IFRSs= an$ .. $isclose the nature of the main a$,ustments that %oul$ make it comply %ith IFRSs. *n un$ertaking nee$ not 3uantify those a$,ustments. 1@*;6A1- historical summaries Bou $eci$e to publish IFRS statements for .@@: %ith IFRS comparatives for the years .@@F-.@@C. Bou also provi$e$ historical summaries of selecte$ $ata for .@@)-.@@E pro$uce$ un$er previous 8**6. For the historical summaries of selecte$ $ata for .@@)-.@@Eyou must: #. label the previous 8**6 information prominently as not being prepare$ un$er IFRSs= an$ .. $isclose the nature of the main a$,ustments that %oul$ make it comply %ith IFRSs. Bou nee$ not 3uantify those a$,ustments. E%planation of transition to IFRSs
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*n un$ertaking shall $isclose ho% the transition from previous 8**6 to IFRSs affecte$ its reporte$ financial position- financial performance an$ cash flo%s. Such $isclosures are essential- in the first "annual& IFRS financial statements as %ell as in interim financial reports "if any&- as they help users un$erstan$ the impact an$ implications of the transition to IFRSs an$ ho% they nee$ to change their analytical mo$els to make the best use of information presente$ using IFRSs. (he re3uire$ $isclosures relate to both: #. the most recent information publishe$ un$er previous 8**6so that users have the most up-to-$ate information= an$ .. the $ate of transition to IFRSs. (his is an important focus of attention for users- preparers an$ au$itors because the opening IFRS balance sheet is the starting point for accounting un$er IFRSs. IFRS # re3uires reconciliations of e3uity an$ profit or loss. 5sers %ill also fin$ it helpful to have information about the other a$,ustments that affect the opening IFRS balance sheet but $o not appear in these reconciliations. *s a reconciliation coul$ be voluminous- IFRS # re3uires $isclosure of narrati)e information about these a$,ustments- as %ell as about a$,ustments to the cash flo% statement. IFRS # states that the reconciliations shoul$ distinguish !hanges in a!!ounting poli!ies from the !orre!tion of http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng For impairment losses "an$ reversals& recor$e$ in preparing the opening IFRS balance sheet- IFRS # re3uires the $isclosures that I*S )F %oul$ re3uire- if those impairment losses "an$ reversals& %ere recognise$ $uring the perio$ starting %ith the $ate of transition to IFRSs. (here is inevitably sub,ectivity about impairment losses. (his $isclosure provi$es transparency about impairment losses recor$e$ on transition to IFRSs. (hese losses might other%ise receive less attention than impairment losses recor$e$ in earlier or later perio$s. Re!ognition of impairment on transition Issue 5n$ertaking + %ill prepare its first IFRS financial statements for the year en$ing )# 9ecember .//>.(he $ate of transition to IFRS %ill be # Danuary .//) an$ the opening IFRS balance sheet %ill be prepare$ as at that $ate.
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errors. !oth components are important an$ their $isclosure shoul$ be re3uire$ because: #. information about changes in accounting policies helps e2plain the transition to IFRSs. .. information about errors helps users assess the reliability of financial information. Furthermore- a failure to $isclose the effect of material errors %oul$ obscure the Hresults of the ste%ar$ship of management- or the accountability of management for the resources entruste$ to it?.

+ has previously applie$ 5S 8**6 an$ has teste$ its long-live$ assets for impairment in accor$ance %ith SF*S #.#.(he 5S stan$ar$ re3uires that assets are first teste$ for impairment by reference to un$iscounte$ cashflo%s. (here %ere in$ications that some assets might be impaire$ at )# 9ecember .//.- but + $i$ not recor$ any impairment in its 5S 8**6 financial statements as a result of applying SF*S #.#. What a$,ustments might be re3uire$ for the opening IFRS balance sheet in respect of impairment of assetsG Solution 5n$ertaking + shoul$ test the long-live$ assets for %hich there is evi$ence of impairment at the $ate of transition- using the gui$ance in I*S )F. I*S )F re3uires that assets are teste$ for impairment using $iscounte$ cash flo%s. When + applies I*S )F- it might i$entify an impairment that $i$ not e2ist un$er 5S 8**6. (he impairment shoul$ be recognise$ on the opening IFRS balance sheet- %ith a correspon$ing a$,ustment to re$uce retaine$ earnings. (he $isclosures re3uire$ by I*S )F shoul$ be given in the first IFRS financial statements. IFRS # re3uires $isclosures about the use of fair value as $eeme$ cost. *lthough the a$,ustment arising from the use of this e2emption appears in the reconciliations- this more-specific $isclosure highlights it. http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng Furthermore- this e2emption $iffers from the other e2emptions that might apply for propertyplant an$ e3uipment "previous 8**6 revaluation or event-$riven fair value measurement&. (he latter t%o e2emptions $o not lea$ to a restatement on transition to IFRSs because they apply only if the measurement %as alrea$y use$ in previous 8**6 financial statements. Re!on!iliations (o e2plain the transition- an un$ertaking?s first IFRS financial statements shall inclu$e: #. reconciliations of its e3uity reporte$ un$er previous 8**6 to its e3uity un$er IFRSs for both of the follo%ing $ates: i. the $ate of transition to IFRSs= an$ ii. the en$ of the latest perio$ presente$ in the un$ertaking?s most recent annual financial statements un$er previous 8**6= 1@*;6A1- reconciliations of its e3uity Bou $eci$e to publish IFRS statements for .@@: %ith comparatives for the years .@@)-.@@C. Bour $ate of transition to IFRSs is #st Danuary .@@). Bou %ill re3uire reconciliations of its e3uity reporte$ un$er previous 8**6 to its e3uity un$er IFRSs for both of the follo%ing $ates: #st Danuary .@@) an$ )#st 9ecember .@@:. .. a reconciliation of the profit or loss reporte$ un$er previous 8**6 for the latest perio$ in the un$ertaking?s most recent
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annual financial statements to its profit or loss un$er IFRSs for the same perio$= an$ ). if the un$ertaking recor$e$ "or reverse$& any impairment losses for the first time in preparing its opening IFRS balance sheet- the $isclosures that I*S )F %oul$ have re3uire$ if the un$ertaking ha$ recognise$ those impairment losses or reversals in the perio$ beginning %ith the $ate of transition to IFRSs. (hese reconciliations shall give sufficient $etail "an$ narrative& to enable users to un$erstan$ the material ad4ustments to the balan!e sheet and in!ome statement . If an un$ertaking presente$ a cash flo% statement un$er its previous 8**6- it shall also e2plain the material a$,ustments to the cash flo% statement. If an un$ertaking becomes a%are of errors ma$e un$er previous 8**6- these reconciliations shall $istinguish the correction of those errors from changes in accounting policies. I*S : $oes not $eal %ith changes in accounting policies that occur %hen an un$ertaking first a$opts IFRSs. (herefore- I*S :?s re3uirements for $isclosures about changes in accounting policies $o not apply in an un$ertaking?s first IFRS financial statements. If an un$ertaking $i$ not present financial statements for previous perio$s- its first IFRS financial statements shall $isclose that fact. #ultiple !hoi!e 9uestions #. IFRS # re3uires an un$ertaking to $o the follo%ing in the opening IFRS balance sheet that it prepares as a starting point for its accounting un$er IFRSs: i. recognise all assets an$ liabilities %hose recognition is re3uire$ by IFRSs= ii. not recognise items as assets or liabilities if IFRSs $o not permit such recognition= iii. reclassify items that it recognise$ un$er previous 8**6 as one type of asset- liability or component of e3uity- but are a $ifferent type of asset- liability or component of e3uity un$er IFRSs= iv. apply IFRSs in measuring all recognise$ assets an$ liabilities= v. $e$uct goo$%ill from e3uity. #. i .. i-ii ). i-iii >. i-iv E. i-v .. (he ob,ective of IFRS # is to ensure that an un$ertaking?s first IFRS financial statements- an$ its interim financial reports for part of the perio$ covere$ by those financial statements- contain high 3uality information that: #. is transparent for users an$ comparable over all perio$s presente$= http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng
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.. provi$es a suitable starting point for accounting un$er IFRSs= ). can be generate$ at a cost that $oes not e2cee$ the benefits to users= >. can be generate$ more 3uickly than un$er previous 8**6. #. .@@). #. i .. i-ii ). i-iii >. i-iv ). Bou $eci$e to publish IFRS statements for .@@: %ith comparatives for the years .@@)-.@@C. Bour $ate of transition to IFRSs is #. #st Danuary .@@). .. #st Danuary .@@C. ). #st Danuary .@@:. >. Bou $eci$e to publish IFRS statements for .@@: %ith comparatives for the years .@@)-.@@C. In them you make an e2plicit an$ unreserve$ statement of compliance %ith IFRSs. Bour first IFRS financial statements are for #. .@@). .. .@@C. ). .@@:. http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng .. .@@C. ). .@@:. F. Bou $eci$e to publish IFRS statements for .@@: %ith comparatives for the years .@@)-.@@C. Bour opening IFRS balance sheet is the balance sheet of # st Danuary: #. .@@). .. .@@C. ). .@@:. C. Bou $eci$e to publish IFRS statements for .@@: %ith comparatives for the years .@@)-.@@C. In them you make an e2plicit an$ unreserve$ statement of compliance %ith IFRSs. <o interim financial reports are pro$uce$. Bour first IFRS reporting $ate is the )#st 9ecember: #. .@@).
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E. Bou $eci$e to publish IFRS statements for .@@: %ith comparatives for the years .@@)-.@@C. In them you make an e2plicit an$ unreserve$ statement of compliance %ith IFRSs. Bour first IFRS reporting perio$ is the year en$ing:

.. .@@C. ). .@@:. :. Bou $eci$e to publish IFRS statements for .@@: %ith comparatives for the years .@@)-.@@C. Bou also pro$uce an interim financial report for Danuary to Dune .@@:. In it you make an e2plicit an$ unreserve$ statement of compliance %ith IFRSs. 9o you apply IFRS # to your interim financial reportG #. Bes. .. <o. ). Bou have an option to $o so. 0. Bou $eci$e to publish IFRS statements for .@@: %ith comparatives for the years .@@)-.@@C. In them you make an e2plicit an$ unreserve$ statement of compliance %ith IFRSs. <o interim financial reports are pro$uce$. (he .@@)-.@@C figures come from management accounts that ha$ been seen only by your $irectors. Bour first IFRS financial statements are for: #. .@@). .. .@@C. ). .@@:. http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng
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#/. If- for e2ample- the un$ertaking: . presente$ its most recent previous financial statements: i. un$er national re3uirements that are not consistent %ith IFRSs in all respects= ii. in conformity %ith IFRSs in all respects- e2cept that the financial statements $i$ not contain an e2plicit an$ unreserve$ statement that they complie$ %ith IFRSs= iii. containing an e2plicit statement of compliance %ith some- but not all- IFRSs= iv. un$er national re3uirements inconsistent %ith IFRSs- using some in$ivi$ual IFRSs to account for items for %hich national re3uirements $i$ not e2ist= or

v. un$er national re3uirements- %ith a reconciliation of some amounts to the amounts $etermine$ un$er IFRSs= %oul$ those financial statements count as the first IFRS financial statementsG #. Bes. .. <o. ). ;aybe. ##. When an un$ertaking: i. stops presenting financial statements un$er national re3uirements- having previously presente$ them as %ell as a secon$ set of financial statements that containe$ an e2plicit an$ unreserve$ statement of compliance %ith IFRSs= ii. presente$ financial statements in the previous year un$er national re3uirements an$ those financial statements containe$ an e2plicit an$ unreserve$ statement of compliance %ith IFRSs= or iii. presente$ financial statements in the previous year that containe$ an e2plicit an$ unreserve$ statement of compliance %ith IFRSs- even if the au$itors 3ualifie$ their au$it report on those financial statements. #. IFRS # applies= .. IFRS # $oes not apply= ). IFRS # may apply. #.. For changes in accounting policies ma$e by an un$ertaking that alrea$y applies IFRSs: http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng #. IFRS # applies= .. IFRS # $oes not apply= ). IFRS # may apply. #). Bou $eci$e to publish IFRS statements for .@@: %ith comparatives for the years .@@)-.@@C. In them you make an e2plicit an$ unreserve$ statement of compliance %ith IFRSs. Bour accounting policies for all years shoul$ be those applicable to #. .@@) .. 1ach year presente$. ). .@@:.
#>. For the follo%ing e2emptions : -business combinations= -fair value or revaluation as $eeme$ cost= -staff benefits= -cumulative translation $ifferences= -compoun$ financial instruments= -assets an$ liabilities of subsi$iaries- associates an$ ,oint ventures= -$esignation of previously-recognise$ financial instruments=
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-share-base$ payment transactions= -insurance contracts= -$ecommissioning liabilities inclu$e$ in the cost of propertyplant an$ e3uipment= -leases= -fair value measurement of financial assets or financial liabilities at initial recognition= an$ -a financial asset or an intangible asset accounte$ for in accor$ance %ith IFRI+ #. Service +oncession *rrangements. #. * first-time a$opter may elect to use one or more= .. * first-time a$opter must choose one= ). * first-time a$opter must use all= >. * first-time a$opter may use none. #E. 5n$er your previous 8**6- you revalue$ your property using an in$epen$ent valuation. Bou have been a$vise$ that the values have not materially change$ at the $ate of transition to IFRSs. #. Bou may use these valuations as $eeme$ cost un$er IFRS= .. Bou must use these valuations as $eeme$ cost un$er IFRS= ). Bou may not use these valuations as $eeme$ cost un$er IFRS. Bou have been a$vise$ that the values have not materially change$ at the $ate of transition to IFRSs. #. Bou may use these valuations as $eeme$ cost un$er IFRS= .. Bou must use these valuations as $eeme$ cost un$er IFRS= ). Bou may not use these valuations as $eeme$ cost un$er IFRS. #C. If a subsi$iary may use as its accounting policy the cost mo$el in I*S #F 6roperty- 6lant an$ 13uipment- the group #. must use the cost mo$el= .. must use the revaluation mo$el= ). may use either. #F. 5n$er your previous 8**6- you revalue$ various assets using an in$epen$ent valuation imme$iately prior to a listing on the stock e2change.
#:. Bour $ate of transition to IFRSs is #st Danuary .@@). In .@@.- you $i$ not $ocument any he$ging relationships- but consi$ere$ them to be he$ges for operational purposes. #. Bou may use these he$ges un$er IFRS= .. Bou must use these he$ges un$er IFRS= ). Bou may not use these he$ges. #0. *n un$ertaking?s $ate of transition to IFRSs is # Danuary .@@> an$ ne% information on #E Duly .@@> re3uires the revision
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of a ba$ $ebt provision estimate ma$e un$er previous 8**6 at )# 9ecember .@@). #. (he un$ertaking shall reflect that ne% information in its opening IFRS balance sheet= .. (he un$ertaking shall reflect that ne% information in its income statement "or- if appropriate- other changes in e3uity& for the year en$e$ )# 9ecember .@@>= ). (he un$ertaking shall ignore that information as it only applies to previous 8**6. ./. Bour $ate of transition to IFRSs is # Danuary .@@). Bou have assets classifie$ as hel$ for sale an$ $iscontinue$ operations that %ere recognise$ an$ value$ un$er your previous 8**6. #. Bou may use these valuations as $eeme$ cost un$er IFRS= .. Bou must use these valuations as $eeme$ cost un$er IFRS= ). Bou may not use these valuations as $eeme$ cost un$er IFRS. .#. Bou $eci$e to publish IFRS statements for .@@: %ith comparatives for the years .@@)-.@@C. Bour comparative information $oes not comply %ith I*S ).- I*S )0 an$ IFRS >. Bour $ate of transition to IFRSs is: #. #st Danuary .@@)= .. #st Danuary .@@)- but #st Danuary .@@: for information provi$e$ un$er I*S ).- I*S )0 an$ IFRS >= http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng
st
). #st Danuary .@@:. ... Bou $eci$e to publish IFRS statements for .@@: %ith comparatives for the years .@@)-.@@C. Bour $ate of transition to IFRSs is #st Danuary .@@). Bou %ill re3uire reconciliations of its e3uity reporte$ un$er previous 8**6 to its e3uity un$er IFRSs for: #. #st Danuary .@@)= .. )#st 9ecember .@@:= ). !oth #st Danuary .@@) an$ )#st 9ecember .@@:.
(nswers to multiple !hoi!e 9uestions 'uestion 1* .. ). >. E. F. (nswer > ) # ) ) #

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C. :. 0. #/. ##. #.. #). #>. #E. #F. #C. #:. #0. ./. .#. ... ) # ) . . . ) # # # ) ) . # . ) statements- the un$ertaking shall satisfy the follo%ing re3uirements- in a$$ition to the re3uirements of I*S )>: #. 1ach such interim financial report shall- if the un$ertaking presente$ an interim financial report for the comparable interim perio$ of the imme$iately prece$ing financial year- inclu$e reconciliations of: i. its e3uity un$er previous 8**6 at the en$ of that comparable interim perio$ to its e3uity un$er IFRSs at that $ate= an$ ii. its total comprehensive income un$er previous 8**6 for that comparable interim perio$ "current an$ year-to-$ate& to its profit or loss un$er IFRSs for that perio$. 1@*;6A1- e3uity an$ profit reconciliations - interim financial report Bou $eci$e to publish IFRS statements for .@@: an$ an interim financial report for the F months to )/th Dune .@@:. Bour comparable interim perio$ of the F months to )/ th Dune .@@C %as pro$uce$ un$er previous 8**6. Bou %ill re3uire reconciliations of e3uity an$ profit bet%een the t%o sets of figures. .. In a$$ition to the reconciliations re3uire$ by "#&- an un$ertaking?s first interim financial report for part of the perio$ covere$ by its first IFRS financial statements shall inclu$e the reconciliations liste$ in the above section "Re!on!iliations@ or a
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( E06I; 1 - Interim finan!ial reports ?see I(S 35 workbook@ I*S )> states that the interim financial report is Hinten$e$ to provi$e an up$ate on the latest complete set of annual financial statements?. (hus- I*S )> re3uires less $isclosure in interim financial statements than IFRSs re3uire in annual financial statements. * first-time a$opter?s first interim financial report un$er I*S )> shoul$ inclu$e sufficient information to enable users to un$erstan$ ho% the transition to IFRSs affecte$ the previously reporte$ annual- as %ell as interim- figures. If an un$ertaking presents an interim financial report un$er I*S )> for part of the perio$ covere$ by its first IFRS financial http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng

cross-reference to another publishe$ $ocument that inclu$es these reconciliations. I*S )> re3uires minimum $isclosures- %hich are base$ on the assumption that users of the interim financial report also have access to the most recent annual financial statements. 4o%everI*S )> also re3uires an un$ertaking to $isclose Hany events or transactions that are material to an un$erstan$ing of the current interim perio$?. (herefore- if a first-time a$opter $i$ not- in its most recent annual financial statements un$er previous 8**6- $isclose information material to an un$erstan$ing of the current interim perio$- its interim financial report shall $isclose that information- or inclu$e a cross-reference to another publishe$ $ocument that inclu$es it. ( E06I; 2 - .usiness !ombinations ?see IFRS 3 workbook@ * first-time a$opter may elect not to apply IFRS ) !usiness +ombinations retrospectively to past business combinations "business combinations that occurre$ before the $ate of transition to IFRSs&. (his e2emption also applies to past ac3uisitions of investments in associates an$ of interests in ,oint ventures. 4o%ever- if a first-time a$opter restates any business combination to comply %ith IFRS )- it shall restate all later business combinations an$ shall also apply I*S )F Impairment of *ssets an$ I*S ): Intangible *ssets from that same $ate. 1@*;6A1 N restatement of a business combination http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng *s a first-time a$opter- you elect to restate a business combination that occurre$ on )/th Dune .@@.. Bou must restate all business combinations that occurre$ bet%een )/th Dune .@@. an$ the $ate of transition to IFRSs- an$ also apply I*S )F an$ I*S ): from )/th Dune .@@.. *n un$ertaking nee$ not apply I*S .# "(he 1ffects of +hanges in Foreign 12change Rates& retrospectively to fair value a$,ustments an$ goo$%ill arising in business combinations that occurre$ before the $ate of transition to IFRSs. If the un$ertaking $oes not apply I*S .# retrospectively to those fair value a$,ustments an$ goo$%ill- it shall treat them as assets an$ liabilities of the un$ertaking rather than as assets an$ liabilities of the ac3uiree. (herefore- those goo$%ill an$ fair value a$,ustments either are alrea$y e2presse$ in the un$ertaking?s functional currency or are non-monetary foreign currency items- %hich are reporte$ using the e2change rate applie$ un$er previous 8**6. *n un$ertaking may apply I*S .# retrospectively to fair value a$,ustments an$ goo$%ill arising in either: #. all business combinations that occurre$ before the $ate of transition to IFRSs= or .. all business combinations that the un$ertaking elects to restate to comply %ith IFRS ). If a first-time a$opter $oes not apply IFRS ) retrospectively to a past business combination- this has the follo%ing conse3uences for that business combination:
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#. (he first-time a$opter shall keep the same classification "as an ac3uisition by the legal ac3uirer- a reverse ac3uisition by the legal ac3uiree- or a uniting of interests& as in its previous 8**6 financial statements. 1@*;6A1 N same classification as in previous 8**6 financial statements Bou accounte$ for a merger as a uniting of interests "no longer allo%e$ un$er IFRS& as in previous 8**6 financial statements. Bou may continue to $o so un$er IFRS- unless you restate earlier business combinations. .. (he first-time a$opter shall recognise all its assets an$ liabilities at the $ate of transition to IFRSs that %ere ac3uire$ or assume$ in a past business combination- other than: i. some financial assets an$ financial liabilities $erecognise$ un$er previous 8**6= an$ ii. assets- inclu$ing goo$%ill- an$ liabilities that %ere not recognise$ in the ac3uirer?s consoli$ate$ balance sheet un$er previous 8**6 an$ also %oul$ not 3ualify for recognition un$er IFRSs in the separate balance sheet of the ac3uiree. (he first-time a$opter shall recognise any resulting change by a$,usting retaine$ earnings "or- if appropriate- another category of e3uity&- unless the change results from the recognition of an intangible asset that %as previously subsume$ %ithin goo$%ill. ). (he first-time a$opter shall e2clu$e from its opening IFRS balance sheet any item recognise$ un$er previous 8**6 that $oes not 3ualify for recognition as an asset or liability un$er IFRSs. (he first-time a$opter shall account for the resulting change as follo%s: i. the first-time a$opter may have classifie$ a past business combination as an ac3uisition an$ recognise$ as an intangible asset an item that $oes not 3ualify for recognition as an asset un$er I*S ):. It shall reclassify that item "an$- if any- the relate$ $eferre$ ta2 an$ minority interests& as part of goo$%ill "unless it $e$ucte$ goo$%ill $irectly from e3uity un$er previous 8**6&. ii. the first-time a$opter shall recognise all other resulting changes in retaine$ earnings. Onote: Such changes inclu$e reclassifications from or to intangible assets if goo$%ill %as not recognise$ un$er previous 8**6 as an asset. (his arises ifun$er previous 8**6- the un$ertaking "a& $e$ucte$ goo$%ill $irectly from e3uity or "b& $i$ not treat the business combination as an ac3uisition.P >. IFRSs re3uire subse3uent measurement of some assets an$ liabilities on a basis that is not base$ on original cost- such as fair value. (he first-time a$opter shall measure these assets an$ liabilities on that basis in its opening IFRS balance sheet- even if they %ere ac3uire$ or assume$ in a past business combination. It shall recognise any resulting change in the carrying amount by a$,usting retaine$ earnings "or- if appropriate- another category of e3uity&- rather than goo$%ill.
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E. Imme$iately after the business combination- the carrying amount un$er previous 8**6 of assets ac3uire$ an$ liabilities assume$ in that business combination shall be their $eeme$ cost un$er IFRSs at that $ate. If IFRSs re3uire a cost-base$ measurement of those assets an$ liabilities at a later $ate- that $eeme$ cost shall be the basis for cost-base$ $epreciation or amortisation from the $ate of the business combination. F. If an asset ac3uire$- or liability assume$- in a past business combination %as not recognise$ un$er previous 8**6- it $oes not have a $eeme$ cost of 7ero in the opening IFRS balance sheet. Instea$- the ac3uirer shall recognise an$ measure it in its consoli$ate$ balance sheet on the basis that IFRSs %oul$ re3uire in the balance sheet of the ac3uiree. 1@*;6A1- asset ac3uire$- or liability assume$- in a past business combination %as not recognise$ un$er previous 8**6 If the ac3uirer ha$ not- un$er its previous 8**6- capitalise$ finance leases ac3uire$ in a past business combination- it shall capitalise those leases in its consoli$ate$ financial statementsas I*S #C Aeases %oul$ re3uire the ac3uiree to $o in its IFRS balance sheet. +onversely- if an asset or liability %as subsume$ in goo$%ill un$er previous 8**6 but %oul$ have been recognise$ separately un$er IFRS )- that asset or liability remains in goo$%ill unless IFRSs %oul$ re3uire its recognition in the financial statements of the ac3uiree. http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng C. (he carrying amount of goo$%ill in the opening IFRS balance sheet shall be its carrying amount un$er previous 8**6 at the $ate of transition to IFRSs- after the follo%ing three a$,ustments: i. (he first-time a$opter shall increase the carrying amount of goo$%ill %hen it reclassifies an item that it recognise$ as an intangible asset un$er previous 8**6. Similarly- if IFRS # re3uires the first-time a$opter to recognise an intangible asset that %as subsume$ in recognise$ goo$%ill un$er previous 8**6- the first-time a$opter shall $ecrease the carrying amount of goo$%ill accor$ingly "an$- if applicable- a$,ust $eferre$ ta2 an$ minority interests&. ii. * contingency affecting the amount of the purchase consi$eration for a past business combination may have been resolve$ before the $ate of transition to IFRSs. If a reliable estimate of the contingent a$,ustment can be ma$e an$ its payment is probable- the first-time a$opter shall a$,ust the goo$%ill by that amount. Similarly- the first-time a$opter shall a$,ust the carrying amount of goo$%ill if a previously recognise$ contingent a$,ustment can no longer be measure$ reliably- or its payment is no longer probable. iii. Regar$less of %hether there is any in$ication that the goo$%ill may be impaire$- the first-time a$opter shall apply I*S )F in testing the goo$%ill for impairment at the $ate of transition to IFRSs an$ in recor$ing any resulting impairment loss in retaine$ earnings "or- if so re3uire$ by I*S )F- in revaluation surplus&. (he impairment test shall be base$ on con$itions at the $ate of transition to IFRSs.
):

:. <o other a$,ustments shall be ma$e to the carrying amount of goo$%ill at the $ate of transition to IFRSs. For e2ample- the firsttime a$opter shall not restate the carrying amount of goo$%ill: i. to e2clu$e in-process research an$ $evelopment ac3uire$ in that business combination "unless the relate$ intangible asset %oul$ 3ualify for recognition un$er I*S ): in the balance sheet of the ac3uiree&= ii. to a$,ust previous amortisation of goo$%ill= iii. to reverse a$,ustments to goo$%ill that IFRS ) %oul$ not permit- but %ere ma$e un$er previous 8**6 $ue to a$,ustments to assets an$ liabilities bet%een the $ate of the business combination an$ the $ate of transition to IFRSs. 0. If the first-time a$opter recognise$ goo$%ill un$er previous 8**6 as a $e$uction from e3uity: i. it shall not recognise that goo$%ill in its opening IFRS balance sheet. Furthermore- it shall not transfer that goo$%ill to the income statement if it $isposes of the subsi$iary- or if the investment in the subsi$iary becomes impaire$. ii. a$,ustments resulting from the subse3uent resolution of a contingency affecting the purchase consi$eration shall be recognise$ in retaine$ earnings. $e$uction from e3uity 5n$er previous 8**6- goo$%ill has been $e$ucte$ from e3uity. (his is not permitte$ un$er IFRS. 4o%ever- it %ill not be change$ un$er IFRS for a first-time a$opter. *s a result: i. you shall not transfer that goo$%ill to the income statement if you $ispose of the subsi$iary- or if the investment in the subsi$iary becomes impaire$. ii. a$,ustments resulting from the subse3uent resolution of a contingency affecting the purchase consi$eration shall be recognise$ in retaine$ earnings. #/. 5n$er its previous 8**6- the first-time a$opter may not have consoli$ate$ a subsi$iary ac3uire$ in a past business combination "for e2ample- because the parent $i$ not regar$ it as a subsi$iary un$er previous 8**6 or $i$ not prepare consoli$ate$ financial statements&. (he first-time a$opter shall a$,ust the carrying amounts of the subsi$iary?s assets an$ liabilities to the amounts that IFRSs %oul$ re3uire in the subsi$iary?s balance sheet. (he $eeme$ cost of goo$%ill e3uals the $ifference at the $ate of transition to IFRSs bet%een: i. the parent?s interest in those a$,uste$ carrying amounts= an$
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1@*;6A1- recognise$ goo$%ill un$er previous 8**6 as a http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng

ii. the cost in the parent?s separate financial statements of its investment in the subsi$iary. ##. (he measurement of minority interests an$ $eferre$ ta2 follo%s from the measurement of other assets an$ liabilities. (herefore- the above a$,ustments to recognise$ assets an$ liabilities affect minority interests an$ $eferre$ ta2. .usiness !ombinations - ad4ustments to deemed !ost #. business combinations= *lthough IFRS # treats amounts assigne$ un$er previous 8**6 to goo$%ill an$ other assets ac3uire$ an$ liabilities assume$ in a past business combination as their $eeme$ cost un$er IFRSs at the $ate of the business combination- an un$ertaking nee$s to a$,ust their carrying amounts in its opening IFRS balance sheetas follo%s. #. *ssets an$ liabilities measure$ un$er IFRSs at fair value or other forms of current value: remeasure to fair value or that other current value. .. *ssets "other than goo$%ill& an$ liabilities for %hich IFRSs apply a cost-base$ measurement: a$,ust the accumulate$ $epreciation or amortisation since the $ate of the business combination if it $oes not comply %ith IFRSs. 9epreciation is base$ on $eeme$ cost- %hich is the carrying amount un$er previous 8**6 imme$iately follo%ing the business combination. ). *ssets "other than goo$%ill& an$ liabilities not recognise$ un$er previous 8**6: measure on the basis that IFRSs %oul$ re3uire in the separate balance sheet of the ac3uiree. http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng .. fair value or revaluations as $eeme$ cost= ). staff benefits= >. cumulative translation $ifferences= E. compoun$ financial instruments= F. assets an$ liabilities of subsi$iaries- associates an$ ,oint ventures= C. $esignation of previously recognise$ financial instruments= an$ :. share-base$ payment transactions. .usiness !ombinations - Fair )alue or re)aluation as deemed !ost IFRS # restricts the use of fair value as $eeme$ cost to those assets for %hich reconstructing costs is likely to be of limite$ benefit to users an$ particularly onerous:
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>. Items that $o not 3ualify for recognition as assets an$ liabilities un$er IFRSs: eliminate from the opening IFRS balance sheet. E%emptions from other IFRSs *n un$ertaking may elect to use one or more of the follo%ing e2emptions:

-propertyplant an$ e3uipment-investment property "if an un$ertaking elects to use the cost metho$ in I*S >/ Investment 6roperty& an$ -intangible assets that meet restrictive criteria. IFRI+ # +hanges in 12isting 9ecommissioning- Restoration an$ Similar Aiabilities re3uires specifie$ changes in $ecommissioningrestoration an$ similar liabilities to be a$$e$ to- or $e$ucte$ from- the cost of the assets to %hich they relatean$ the a$,uste$ $epreciable amount to be $epreciate$ prospectively over the remaining useful life of those assets. Retrospective application of this re3uirement at the $ate of transition %oul$ re3uire an un$ertaking to construct a historical recor$ of all such a$,ustments that %oul$ have been ma$e in the past. In many cases this %ill not be practicable. *s an alternative to complying %ith this re3uirement- an un$ertaking is permitte$ to inclu$e in the $epreciate$ cost of the asset- at the $ate of transition to IFRSs- an amount calculate$ by $iscounting the liability at that $ate back to- an$ $epreciating it from- %hen the liability %as first incurre$.
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IFRS 1 First-Time Adoption of IFRS 2011: For Accounting Professionals

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IFRS 1 First-Time Adoption of IFRS 2011: For Accounting Professionals

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for Accounting Professionals

IFRS 1 First-time adoption of IFRS 2011

IFRS 1 First-time adoption of IFRS

IFRS WOR !OO S "# million $o%nloa$e$&

IFRS 1 First-time adoption of IFRS

(dopting IFRS especially for its comprehensive e2ample.

#ain features of IFRS 1

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

(nswers to multiple !hoi!e 9uestions 'uestion 1* .. ). >. E. F. (nswer > ) # ) ) #

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

1@*;6A1- recognise$ goo$%ill un$er previous 8**6 as a http://bankir.ru/technology/vestnik/uchebnye-posobiya-po-msfoeng

IFRS 1 First-time adoption of IFRS

IFRS 1 First-time adoption of IFRS

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