PFRS 1 Objectives and Application

First-time Adoption of PFRS

• The selected policies are applied to all financial statements presented together with the first PFRS financial statements.
• PFRS 1 requires retrospective application of the accounting policies selected, but grants exemptions if the cost exceeds the benefits or requires management judgments about past conditions.
• The first PFRS financial statements shall include at least one-year comparative information.

Transition to PFRSs

• The objective of PFRS 1 is to ensure that an entity's first financial statements contain high-quality, transparent, comparable, and cost-efficient information.
• The first PFRS financial statements require an entity to explain how the transition to PFRSs affected its financial statements.
• This includes providing reconciliations of equity and comprehensive income, and other relevant disclosures.

Definition of First PFRS Financial Statements

• First PFRS financial statements are the first annual financial statements that adopt PFRSs with an explicit and unreserved statement of compliance.
• PFRS 1 only applies once, when the entity first adopts PFRSs.
• It does not apply if previous financial statements contained an explicit and unreserved statement of compliance, even if the auditors' report was qualified.

Opening PFRS Statement of Financial Position

• PFRS 1 requires an entity to prepare and present an opening PFRS statement of financial position at the date of transition to PFRSs.
• The date of transition is the beginning of the earliest period for which an entity presents full comparative information under PFRSs in its first PFRS financial statements.

Accounting Policies

• The entity selects its accounting policies based on the latest versions of PFRSs as at the current reporting date.