Q1IFRS - Intermediate Accounting (Kieso)

Question

How is the date of transition and the date of reporting determined in first-time adoption of IFRS?

Step-by-Step Solution

Answer

IFRS requires an organisation acquiring IFRS standards initially to arrange a definite collection of accounting statements enclosing its initial IFRS listing period and the prior year.

Step 1: Meaning of Date of Transition

The date of transition is the start of the prior period for which an organisation states to complete illustrative information under IFRS.

Step 2: Date of transition and the date of reporting determined in first-time adoption of IFRS

The first time IFRS adoption of, IFRS needed an organisation to remake its prior two financial statements according to the transition requirement lay down under IFRS 1.

In case an organisation wants to adopt IFRS from April 1, 2015 (presuming that the accounting year commences from April 1 and ends on March 31). It has to recognise April 1, 2014, as the transition date, and the listing date will be March 31, 2015, March 31, 2016, And March 31 2017.

Thus, an organisation's initial IFRS assembled financial statement should have a financial position for the preceding three periods.