IFRS 1

Prepare the opening statement of financial position

- The starting point for adopting IFRS is preparation of the statement of financial position at the “Transition date”. This is the first day of the first comparative year under IFRS (e.g 1 January 2025 for the entities applying calendar year-end).

- It should be prepared but not disclosed in the notes to the financial statements, however, reconciliations of equity reported under previous VAS to equity under IFRS at the date of transition to IFRS must be disclosed.

- The opening statement of financial position will reflect all adjustments from VAS to IFRS on the date of transition. These are typically made through retained earnings unless another account is specified.

- The opening statement of financial position is typically prepared on the basis of retrospective application of all IFRS guidance that is in force on the final conversion date. However, there are several elective exemptions to the general rule. In addition, there are several mandatory exceptions to the general rule.

Identify elective exemptions that apply to the general rule of IFRS 1

There are some further optional exemptions to the general restatement and measurement principles. The following exceptions are individually optional. They relate to:

• business combinations,
• share-based payment transactions,
• insurance contracts,
• fair value, previous carrying amount, or revaluation as deemed cost,
• leases,
• cumulative translation differences,
• investments in subsidiaries, jointly controlled entities, associates and joint ventures,
• assets and liabilities of subsidiaries, associated and joint ventures,
• compound financial instruments,
• designation of previously recognized financial instruments,
• fair value measurement of financial assets or financial liabilities at initial recognition,
• decommissioning liabilities included in the costs of property, plant and equipment,
• financial assets or intangible assets accounted for in accordance with IFRIC 12 Service Concession Arrangements,
• borrowing costs,
• transfers of assets from customers,
• extinguishing financial liabilities with equity instruments
• severe hyperinflation,
• joint arrangements, and
• stripping costs in the production phase of a surface mine.

Identify other exemptions to retrospective application

There are currently 5 exceptions on first-time adoption. These are as follows:

• IAS 39 – De-recognition of financial instruments
• IFRS 9 – Hedge accounting
• IAS 27 – Non-controlling interest
• Full-costs oil and gas assets
• Determining whether an arrangement contains a lease

Prepare interim financial statement disclosures

The interim disclosure requirements are as follows:

• A reconciliation from equity under VAS to IFRS at the date of transition and at the last annual statement of financial position date;
• A reconciliation from equity under VAS to IFRS at the statement of financial position date;
• A reconciliation from profit or loss under VAS to IFRS for that period - this applies for both the period (i.e. quarter) and for the year to date;
• A reconciliation from profit or loss under VAS to IFRS for the most recent annual period presented;
• Details of any material adjustments to the cash flow statement; and
• Details of any impairment losses or reversals of impairment on first-time adoption of IFRS.

Prepare financial statement disclosures

The annual disclosure requirements are as follows:

• A reconciliation from equity under VAS to IFRS at the date of transition (and at the last annual statement of financial position date if different);
• A reconciliation from profit or loss under Vietnamese GAAP to IFRS for the most recent annual period presented;
• Details of any impairment losses or reversals of impairment on first time adoption of IFRS; and
• Details of any material adjustments to the cash flow statement.