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AASB 1 - First-time Adoption of Australian Equivalents to International Financia
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Currency of material  
This material was last updated when this standard was released in July 2004.  
 
A list of the omnibus amending standards issued up until July 2007 that have affected this standard since this date is included in the following table. The table also contains the date when the relevant changes become operative. 
 
Omnibus amending standards are available on the AASB website as are compiled standards incorporating omnibus amendments as soon as they are completed by the AASB. 
 
Details of the changes made by each omnibus are summarised in ANT and Charter’s “The Panel” as they are released. For a quick overview of the new material applying at 30 June 2007 click here.  

 
Text of the Standard 
Summary 
AIFRS compared to IFRS and old AGAAP 
Interpretations and guidance 
Questions & answers 
Articles 
 
 
Reasons for Issuing AASB 1 
 
The Australian Accounting Standards Board (AASB) is implementing the Financial Reporting Council’s policy of adopting the Standards of the International Accounting Standards Board (IASB) for application to reporting 
periods beginning on or after 1 January 2005. 
 
The AASB’s Standards are being changed to adopt the IASB Standards effective at that date by replacing relevant existing AASB Standards with Australian Standards equivalent to those of the IASB. The AASB has decided it will continue to issue sector neutral Standards, that is, Standards applicable to both for-profit and not-for profit entities, including public sector entities. 
 
Except for Standards that are specific to the not-for-profit or public sectors or that are of a purely domestic nature, the AASB intends to use the IASB Standards as the “foundation” Standards to which it will add material detailing the scope and applicability of a Standard in the Australian environment. It is intended that additions will be made, where necessary, to broaden the content to cover sectors not addressed by an IASB Standard and domestic, regulatory or other issues. 
 
This Standard is part of the set of Australian International Financial Reporting Pronouncements (AIFRPs) designed to provide Australian Standards equivalent to each International Accounting Standard (IAS) and International Financial Reporting Standard (IFRS) of the IASB. 
 
The AIFRPs include UIG Abstracts corresponding to the IASB Interpretations originated by the International Financial Reporting Interpretations Committee (IFRIC) and the former Standing Interpretations Committee (SIC). For-profit entities that comply with the requirements of all AIFRPs will simultaneously be in compliance with the requirements of all IFRSs and be able to make an explicit and unreserved statement of compliance with IFRSs. 
 
Some AIFRPs contain Australian-added paragraphs applicable only to not for- profit (NFP) entities, with the limited applicability specified at the start of the paragraph. Some of these “Aus” paragraphs provide additional guidance for NFP entities but others contain requirements inconsistent with the corresponding IASB standard. When an NFP entity is required to comply with a requirement that conflicts with the IASB counterpart, it will comply with AIFRPs but it will not be able to make an explicit and unreserved statement of compliance with IFRSs. 
 
 
Main Features of this Standard 
 
This Standard is applicable to annual reporting periods beginning on or after 1 January 2005. When an entity adopts AIFRPs for the first time, an explicit and unreserved statement of compliance with AIFRPs is required. To promote comparability among the financial reports of Australian entities, early adoption of this Standard is not permitted. In general, AASB 1 requires an entity to comply with each AIFRP effective at the reporting date for its first AIFRP financial report. In particular, AASB 1 requires an entity to do the following in the opening AIFRP balance sheet that it prepares as a starting point for its accounting under AIFRPs: 
 
(a) recognise all assets and liabilities whose recognition is required by AIFRPs; 
(b) not recognise items as assets or liabilities if AIFRPs do not permit such recognition; 
(c) reclassify items recognised under previous GAAP as assets, liabilities or components of equity in accordance with AIFRPs; and 
(d) apply AIFRPs in measuring all recognised assets and liabilities. 
 
This Standard grants limited exemptions from the AIFRP requirements in specified areas where the cost of compliance would be likely to exceed the benefits to users of financial reports. This Standard also prohibits retrospective application of AIFRPs in some areas, particularly where retrospective application would require judgements by management about past conditions after the outcome of a particular transaction is already known. 
 
This Standard requires disclosures that explain how the transition from previous GAAP to AIFRPs affected the entity’s reported financial position, financial performance and cash flows. 
 
 
Changes from Previous Requirements 
 
Unlike previous requirements in Australia (in AASB 1001 and AAS 6 Accounting Policies and transitional requirements in various other Accounting Standards), AASB 1 requires retrospective application in most 
areas. This Standard: 
 
(a) includes targeted exemptions from retrospective application (to avoid costs that would be likely to exceed the benefits to users of financial reports) and a small number of other exceptions for practical reasons; 
(b) clarifies that an entity applies the latest version of AIFRPs; 
(c) clarifies how a first-time adopter’s estimates under AIFRPs relate to the estimates it made for the same date under previous GAAP; 
(d) specifies that the transitional provisions in other AIFRPs do not apply to a first-time adopter; and 
(e) requires enhanced disclosure about the transition to AIFRPs. 
 
Comparison with International Pronouncements 
 
AASB 1 is equivalent to IFRS 1 First-time Adoption of International Financial Reporting Standards, issued by the IASB.