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13 October 2009

EFRAG's Final Endorsement Advice Adoption of the Amendments to IFRS 1 Additional Exemptions for First-time Adopters


IFRS 1 provides guidance on the initial adoption of IFRS and a limited number of exemptions and exceptions as a solution for certain implementation issues arising on first-time adoption. The Amendments introduce three new exemptions to existing IFRS.

IFRS 1 provides guidance on the initial adoption of IFRS and provides a limited number of exemptions and exceptions as a practical solution for certain implementation issues that arise on first-time adoption. The Amendments introduce three new exemptions to existing IFRS for first-time adopters.

 
       One amendment provides for a new ‘deemed cost’ exemption for certain oil and gas assets.
       A second amendment is related to the first amendment and requires an entity that uses the deemed cost exemption to recognise directly in retained earnings any difference between the amount of decommissioning, restoration and similar liabilities as calculated under IFRS, as well as the amount of the liability as calculated under the entity’s previous GAAP.
       The third amendment provides an exemption from the requirement to carry out, on transition to IFRS, an IFRIC 4 assessment to determine whether the entity’s arrangements contain leases, if application by an entity’s previous GAAP would be expected to produce a similar result as IFRS.
 
The Amendments will apply for entities transitioning to IFRS for the first time for annual periods beginning on or after 1 January 2010.


© EFRAG - European Financial Reporting Advisory Group


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