Finance lease not capitalised under previous GAAP Background Entity A”s date of transition to IFRSs is 1 January 2012. Entity A acquired Entity B on 15 January 2008 and did not capitalise Entity B”s finance leases. If Entity B prepared separate financial statements under IFRSs, it would recognise finance lease obligations of £300 and leased assets of £250 at 1 January 2012. Application of requirements […]

Meaning of ‘available for immediate sale 1 Disposal of a headquarters building An entity is committed to a plan to sell its headquarters building and has initiated actions to locate a buyer. (a) The entity intends to transfer the building to a buyer after it vacates the building. The time necessary to vacate the building is usual and customary for sales of such assets. The […]

Restructuring provision Background Entity C”s first IFRS financial statements are for a period that ends on 31 December 2013 and include comparative information for 2012 only. It chooses not to restate previous business combinations under IFRSs. On 1 July 2011, Entity C acquired 100 per cent of Entity D. Under its previous GAAP, Entity C recognised an (undiscounted) restructuring provision of ¥100 that would not […]

Exceptions to the ‘one year rule Scenario illustrating (a) above An entity in the power generating industry is committed to a plan to sell a disposal group that represents a significant portion of its regulated operations. The sale requires regulatory approval, which could extend the period required to complete the sale beyond one year. Actions necessary to obtain that approval cannot be initiated until after […]

Provisionally determined fair values Entity B acquired Entity C in August 2011 and made a provisional assessment of Entity C”s identifiable net assets in its 31 December 2011 consolidated financial statements under its previous GAAP. In its 31 December 2012 consolidated financial statements – its last financial statements under previous GAAP – Entity B completed the initial accounting for the business combination and adjusted the […]

Measuring and presenting subsidiaries acquired with a view to sale and classified as held for sale Entity A acquires an entity H, which is a holding company with two subsidiaries, S1 and S2. S2 is acquired exclusively with a view to sale and meets the criteria to be classified as held for sale. Accordingly, S2 is also a discontinued operation .The fair value less costs […]

Items measured on a cost basis Entity A applies the business combination exemption under IFRS 1. In a business combination Entity A acquired property, plant and equipment, inventory and accounts receivable. Under its previous GAAP, Entity A initially measured these assets at cost (i.e. their fair value at the date of acquisition). Upon adoption of IFRSs, Entity A determines that its accounting policy for these […]

Allocation of impairment loss to the components of a disposal group [IFRS 5.IG10] An entity plans to dispose of a group of its assets (as an asset sale). The assets form a disposal group, and are measured as follows: Carrying amount at Carrying amount as the reporting date remeasured immediately  before classification before classification as  as held for sale held for sale Goodwill 1,500 1,500 […]

Items not measured at original cost Entity A acquired in a business combination a trading portfolio of equity securities and a number of investment properties. Under its previous GAAP, Entity A initially measured these assets at cost (i.e. their fair value at the date of acquisition). Upon adoption of IFRSs, Entity A measures the trading portfolio of equity securities and the investment properties (under the […]

First IFRS financial statements outside the annual report or statutory financial statements Entity E prepared financial statements under its previous GAAP for the period ending 31 December 2011. In connection with its initial public offering, Entity E published an offering document that includes IFRS financial statements that contain an unreserved statement of compliance with IFRSs. The date of transition to IFRSs for the purposes of […]