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IFRS 1 Amendments: Additional Exemptions for First-Time Adopters


The amendments to IFRS 1 addressed potential challenges for jurisdictions adopting IFRSs.
The amendments include: 

  • that an entity that used full cost accounting under its previous GAAP shall be allowed to elect, at the date of transition to IFRSs, to measure exploration and evaluation assets at the amount determined under the entity's previous GAAP and to measure oil and gas assets in the development or production phases by allocating the amount determined under the entity's previous GAAP for those assets to the underlying assets pro rata using reserve volumes or reserve values as of that date. The entity shall test exploration and evaluation assets and assets in the development and production phases for impairment at the date of transition to IFRSs in accordance with IFRS 6 Exploration for and Evaluation of Mineral Resources or IAS 36 Impairment of Assets respectively and, if necessary, reduce the deemed cost determined as described above; and
  • that, if a first-time adopter made the same determination under previous GAAP as that required by IFRIC 4, determining whether an arrangement contains a Lease but at a date other than that required by IFRIC 4, the first-time adopter need not reassess that determination when it adopts IFRSs.  

EFRAG issued its comment letter in response to the Exposure Draft in January 2009 and submitted its endorsement advice to the European Commission in October 2009.

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