PFRS 1 Objectives and Application

The policies used to create financial statements that are presented with the first PFRS statements should be consistently applied to all statements for the entire period of the first PFRS implementation. This means the same accounting policies should be used throughout the company's initial adoption of IFRS, even for periods beyond the initial reporting period.

PFRS 1 does not mandatorily require retrospective application when initially adopting PFRS standards. This means that the first-time adopter has the flexibility to choose the treatment of the accounting policies selected for the transition to PFRS.

The initial financial statements prepared under PFRS do not require two-year comparative information. Only the first full year under PFRS needs to be reported.

The first-time adopter of PFRS is expected to clearly communicate the impact of the transition to PFRS on their financial statements. This communication is accomplished by providing reconciliations of equity and comprehensive income. This means they explain how the transition to IFRS influenced their financial position.

The first-time adopter of PFRS is required to explain the effects of adopting IFRS on their financial statements. This is done through various disclosures such as reconciliations, adjustments, and other relevant information to help users understand the impacts of the transition.

The objective of PFRS 1 is to ensure that the first financial statements produced by a company after adopting PFRSs are of high quality and are easily understood by users and comparable to other companies.

PFRS 1 does not apply if the previous financial statements had already stated compliance with PFRS (IFRS) and there were no outstanding issues. However, if the auditor's report had a qualification, PFRS 1 would be applicable.

PFRS 1 requires the preparation of a specific statement called the 'opening PFRS statement of financial position' at the point in time when the company switches to PFRS. This statement acts as the starting point for the new IFRS system.

The transition date does not represent the end of the period when PFRSs are fully applied for the initial time. The transition date signifies the beginning of the implementation of the accounting principles of PFRS.

The application of the PFRSs begins at the date of transition to PFRSs. This signifies that the new rules and standards of PFRS are applied to the accounts and financial reporting from that point onwards.

The entity applies the most up-to-date versions of PFRS standards relevant to the specific reporting period. They cannot select accounting policies based solely on the latest version at the reporting period's end.