{"id":4495,"date":"2024-03-25T10:43:53","date_gmt":"2024-03-25T03:43:53","guid":{"rendered":"https:\/\/brochure.crowevietnam.vn\/en\/?post_type=an-pham&p=4495"},"modified":"2025-12-16T15:38:44","modified_gmt":"2025-12-16T08:38:44","slug":"ifrs-1","status":"publish","type":"insight","link":"https:\/\/brochure.crowevietnam.vn\/en\/insights\/ifrs-1\/","title":{"rendered":"Standard IFRS 1 – First-time Adoption of IFRS"},"content":{"rendered":"

IFRS 1 is issued to apply to entities preparing financial statements under IFRS for the first time. Accordingly, Vietnamese enterprises will follow the guidance in this standard to transition their financial statements for the first time to IFRS according to the Ministry of Finance\u2019s roadmap.<\/p>\n

IFRS 1 guides financial statement preparers on how to set up the opening balances for the accounting system under IFRS. This is usually done through the opening balance sheet<\/strong>, where items in the balance sheet are typically adjusted through equity<\/strong> accounts<\/strong> to record differences when first applying IFRS standards.<\/p>\n

Below are some key points to note when first applying IFRS, to ensure consistency and proper reflection of the effects when first adopting IFRS in the Financial Statements.<\/p>\n\n\n\n\n\n\n\n\n
Task<\/strong><\/td>\nDetails<\/strong><\/td>\n<\/tr>\n
Prepare the opening balance sheet<\/td>\n\n
    \n
  • The first step when transitioning to IFRS is to prepare the opening balance sheet at the \u201cTransition Date.\u201d This is the first day of the first financial year to be compared under IFRS (for example, January 1, 2025, for companies applying a calendar year-end).<\/li>\n
  • This needs to be prepared but does not need to be disclosed in the financial statement notes. However, it is still necessary to disclose the reconciliation and comparison of equity items at the transition date.<\/li>\n
  • The opening balance sheet will reflect all adjustments from VAS (Vietnamese Accounting Standards) to IFRS at the transition date. These are usually made through the retained earnings account, except for specific accounts that are otherwise designated.<\/li>\n
  • The opening balance sheet is typically prepared based on the assumption that all effective IFRS guidance at the final transition date is applied retrospectively. However, some exemptions from mandatory application may apply, apart from general requirements (see below).<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n
Identifying optional exemptions from the general principles of measurement and disclosure under IFRS 1<\/td>\nThe optional exemptions from the general principles of measurement and disclosure under IFRS 1 include:<\/p>\n
    \n
  • Business combinations,<\/li>\n
  • Share-based payment transactions,<\/li>\n
  • Insurance contracts,<\/li>\n
  • Fair value, carrying amount, and estimated value,<\/li>\n
  • Lease operations,<\/li>\n
  • Foreign exchange differences,<\/li>\n
  • Investments in subsidiaries, associates, joint ventures, and joint arrangements,<\/li>\n
  • Assets and liabilities to be settled with subsidiaries, associates, joint ventures, and joint arrangements,<\/li>\n
  • Financial instruments,<\/li>\n
  • Changes in the nature of financial instruments previously recognized,<\/li>\n
  • Fair value of assets and liabilities at the date of initial recognition,<\/li>\n
  • Costs of major inspections included in the carrying amount of property, plant, and equipment,<\/li>\n
  • Financial assets and intangible assets subject to concession arrangements (IFRIC 12),<\/li>\n
  • Borrowing costs,<\/li>\n
  • Customer advances,<\/li>\n
  • Settlement of financial liabilities with equity instruments,<\/li>\n
  • Impact of hyperinflation,<\/li>\n
  • Joint arrangements,<\/li>\n
  • Costs for stripping activities during the production phase (mining activities).<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n
Exemptions when applying other IFRSs retrospectively<\/td>\nCurrently, there are five exemptions when applying IFRS for the first time:<\/p>\n
    \n
  • IAS 39 – Derecognition of financial instruments,<\/li>\n
  • IFRS 9 – Hedge accounting,<\/li>\n
  • IAS 27 – Non-controlling interests,<\/li>\n
  • Oil and gas asset values,<\/li>\n
  • Determining whether an arrangement contains a lease.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n
Preparing and presenting disclosures for interim financial reports<\/td>\nDisclosure requirements for interim financial reports:<\/p>\n
    \n
  • Reconciliation of equity items under VAS and IFRS at the transition date and at the end of the financial year;<\/li>\n
  • Reconciliation of equity items under VAS and IFRS at the date of preparing the financial report;<\/li>\n
  • Reconciliation of profit or loss statements between VAS and IFRS for the financial year \u2013 applicable to both quarterly and year-end reports;<\/li>\n
  • Reconciliation of profit or loss statements between VAS and IFRS for the most recent financial year;<\/li>\n
  • Details of significant adjustments in the cash flow statement; and<\/li>\n
  • Details of the impact of asset impairment or the reversal of impairment recognized for the first-time IFRS adoption.<\/li>\n<\/ul>\n<\/td>\n<\/tr>\n
Preparing and presenting disclosures for annual financial statements<\/td>\nDisclosures for annual financial statements include:<\/p>\n