CHAPTER 30 – FIRST TIME ADOPTION OF PFRS

FIRST TIME ADOPTER

• An entity that presents for the first time its financial statements in conformity with Philippine
Financial Reporting Standards
• When for the first time such entity makes an explicit and unreserved statements that its general-
purpose financial statements comply with PFRS

FIRST PFRS FINANCIAL STATEMENTS

• First annual statements in which an entity adopts PFRS by an explicit and unreserved statement
of compliance with PFRS
• Financial statements presented by an entity in the current year would qualify as first PFRS financial
statements under the following conditions:
o When an entity presented its most recent previous financial statements:
▪ Under national GAAP inconsistent with PFRS in all respects.
▪ In conformity with PFRS in all respects but these statements did not contain an
explicit and unreserved statement of compliance with PFRS.
▪ Containing an explicit statement of compliance with some but not all PFRS.
▪ Under national GAAP with a reconciliation of selected figures to amounts
determined under PFRS.
o When an entity prepared financial statements in the previous period under PFRS but the
financial statements were for internal use only.
o When an entity prepared financial statements in the previous period under PFRS for
consolidation purposes without preparing a complete set of financial statements.
o When an entity did not present financial statements in the previous period.

DATE TRANSITION TO PFRS

• Refers to the beginning of the earliest period for which an entity presents full comparative
information under PFRS in its first PFRS financial statements.
• Depends on two factors:
o The date of adoption of PFRS
o The number of years of comparative information that an entity decides to present
together with the financial statements in the year of adoption.

OPENING PFRS STATEMENT OF FINANCIAL POSITION

• Is the statement of financial position prepared by a first time adopter on the date of transition to
PFRS
• Is the starting point for accounting in accordance with PFRS
• In preparing the opening statement of financial position, an entity is required for:
o Recognize all assets and liabilities required by PFRS
o Derecognize assets and liabilities not permitted by PFRS
o Reclassify items that it recognized under previous GAAP as one type of asset, liability or
equity but a different type of asset, liability or equity under PFRS.
o Measure all recognized assets and liabilities in compliance with PFRS.
• Any adjustments required to present an opening PFRS statement of financial position should be
recognized in retained earnings or if appropriate, in another component of equity.
FIRST PFRS FINANCIAL STATEMENTS
• Three statements of financial position
o at the end of current year
o at the end of prior year, and
o at the date of transition to PFRS.
• Two statements of comprehensive income
o Current year
o Prior year
• Two separate income statement
o Current year
o Prior year
• Two statement of changes in equity
o Current year
o Prior year
• Two statement of cash flows
o Current year
o Prior year
• Notes to financial statements including comparative information