Transition to IFRS1

All topics related to IFRS Standards.
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marea
Posts: 135
Joined: 27 Feb 2020, 17:35

Transition to IFRS1

Post by marea »

Hello everyone,
I have a question regarding the application of IFRS 1 for a company that spun off a couple of years ago. How many years back do we need to go to assess transactions/ contracts for IFRS 1 purposes? Is the date when the spin-off occurred relevant or the effective date of the contracts? Some of them were just transferred to the new company (e.g., lease contracts…). It is my view that leagly speaking, the company exists only from the date of the spin-off, but could you please confirm that for transition purposes, we would only consider this date.
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Marek Muc
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Re: Transition to IFRS1

Post by Marek Muc »

I guess we can say that this spin-off was a business combination under common control, so the starting point is for you to decide what accounting basis do you choose. If the book-value method, then IMO you need to go back to the pre-combination data.
marea
Posts: 135
Joined: 27 Feb 2020, 17:35

Re: Transition to IFRS1

Post by marea »

Thank you Marek. This makes sense to me.
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