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In first time adoption of IFRS, the effects of adjsutment of adoption till the transition date can be given in retained earnings. However, what about comparative year effect ? Can we charge the same to Retained earnings or to Profit and loss. Suppose 31 March 2017 is the first reporting period hence till 1 april 2015 being transition date, effects will be given in retained earnings but what about effects of comparaive year 2015-16.
in IFRS 1 - First-time Adoption of International Financial Standards by

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IFRS 1 provides that an entity shall recognize those adjustments directly in retained earnings (or, if appropriate, another category of equity) at the date of transition to IFRS. An entity’s first IFRS financial statements shall include at least three statements of financial position, two statements of profit or loss and other comprehensive income, two separate statements of profit or loss (if presented), two statements of cash flows and two statements of changes in equity and related notes. This additional statement of financial position does not bring forward the date of transition. This is because that date is defined as the beginning of the earliest period for which an entity presents full comparative information under IFRSs.

by Level 4 Member (7.6k points)


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