Appendix to the Standard for the Implementation of the Accounting Framework for General Warehouses of Deposit

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Documents published by the IASB to accompany IFRS 1 First-time Adoption of International Financial Reporting Standards The normative text of IFRS 1 is in Part A of this edition. Its effective date at the time of issuance was 1 July 2009. This part presents the following supplementary documents:

APPROVAL BY THE BOARD OF IFRS 1 ISSUED IN NOVEMBER 2008 APPROVAL BY THE BOARD OF AMENDMENTS TO IFRS 1: Additional Exemptions for First-time Adopters of IFRSs issued in July 2009 Limited Exemption from Comparative IFRS 7 Disclosure for First-time Adopters of IFRSs issued in January 2010 Severe Hyperinflation and Removal of Dates for First-time Adopters of IFRSs issued in December 2010 Government Loans issued in March 2012 BASIS FOR CONCLUSIONS APPENDIX Amendments to the Basis for Conclusions of other IFRSs IMPLEMENTATION GUIDANCE CONCORDANCE TABLE

IFRS 1 IFRS Foundation B25 Accounting Framework for General Warehouses of Deposit Resolution No. CD-SIBOIF-1026-1-NOV10-2017 IFRS Version 2017

Approval by the Board of IFRS 1 issued in November 2008 International Financial Reporting Standard 1 First-time Adoption of International Financial Reporting Standards (revised in 2008) was approved for issue by the thirteen members of the International Accounting Standards Board (IASB)1 Sir David Tweedie Chairman Thomas E Jones Vice-Chairman Mary E Barth Stephen Cooper Philippe Danjou Jan Engström Robert P Garnett Gilbert Gélard James J Leisenring Warren J McGregor John T Smith Tatsumi Yamada Wei-Guo Zhang 1 Professor Barth and Mr Philippe Danjou voted against Cost of an Investment in a Subsidiary, Jointly Controlled Entity or Associate (Amendments to IFRS 1 and IAS 27) issued in May 2008. Their dissenting opinions are set out after the Basis for Conclusions of IAS 27.

IFRS 1 B26 IFRS Foundation Accounting Framework for General Warehouses of Deposit Resolution No. CD-SIBOIF-1026-1-NOV10-2017 IFRS Version 2017

Approval by the Board of Additional Exemptions for First-time Adopters of IFRSs (Amendments to IFRS 1) issued in July 2009 Additional Exemptions for First-time Adopters of IFRSs (Amendments to IFRS 1) was approved for issue by the fourteen members of the International Accounting Standards Board. Sir David Tweedie Chairman Thomas E Jones Vice-Chairman Mary E Barth Stephen Cooper Philippe Danjou Jan Engström Robert P Garnett Gilbert Gélard Prabhakar Kalavacherla James J Leisenring Warren J McGregor John T Smith Tatsumi Yamada Wei-Guo Zhang

IFRS 1 IFRS Foundation B27 Accounting Framework for General Warehouses of Deposit Resolution No. CD-SIBOIF-1026-1-NOV10-2017 IFRS Version 2017

Approval by the Board of Limited Exemption from Comparative IFRS 7 Disclosure for First-time Adopters of IFRSs (Amendment to IFRS 1) issued in January 2010 Limited Exemption from Comparative IFRS 7 Disclosure for First-time Adopters of IFRSs (Amendment to IFRS 1) was approved for issue by the fifteen members of the International Accounting Standards Board. Sir David Tweedie Chairman Stephen Cooper Philippe Danjou Jan Engström Patrick Finnegan Robert P Garnett Gilbert Gélard Amaro Luiz de Oliveira Gomes Prabhakar Kalavacherla James J Leisenring Patricia McConnell Warren J McGregor John T Smith Tatsumi Yamada Wei-Guo Zhang

IFRS 1 B28 IFRS Foundation Accounting Framework for General Warehouses of Deposit Resolution No. CD-SIBOIF-1026-1-NOV10-2017 IFRS Version 2017

Approval by the Board of Severe Hyperinflation and Removal of Dates for First-time Adopters of IFRSs (Amendments to IFRS 1) issued in December 2010 Severe Hyperinflation and Removal of Dates for First-time Adopters of IFRSs was approved by the fifteen members of the International Accounting Standards Board. Sir David Tweedie Chairman Stephen Cooper Philippe Danjou Jan Engström Patrick Finnegan Amaro Luiz de Oliveira Gomes Prabhakar Kalavacherla Elke König Patricia McConnell Warren J McGregor Paul Pacter Darrel Scott John T Smith Tatsumi Yamada Wei-Guo Zhang

IFRS 1 IFRS Foundation B29 Accounting Framework for General Warehouses of Deposit Resolution No. CD-SIBOIF-1026-1-NOV10-2017 IFRS Version 2017

Approval by the Board of Government Loans (Amendments to IFRS 1) issued in March 2012 Government Loans (Amendments to IFRS 1) was approved for issue by the fourteen members of the International Accounting Standards Board. Hans Hoogervorst Chairman Ian Mackintosh Vice-Chairman Stephen Cooper Philippe Danjou Jan Engström Patrick Finnegan Amaro Luiz de Oliveira Gomes Prabhakar Kalavacherla Patricia McConnell Takatsugu Ochi Paul Pacter Darrel Scott John T Smith Wei-Guo Zhang

IFRS 1 B30 IFRS Foundation Accounting Framework for General Warehouses of Deposit Resolution No. CD-SIBOIF-1026-1-NOV10-2017 IFRS Version 2017

INDEX from paragraph BASIS FOR CONCLUSIONS OF IFRS 1 FIRST-TIME ADOPTION OF INTERNATIONAL FINANCIAL REPORTING STANDARDS INTRODUCTION FC1 RESTRUCTURING OF IFRS 1 FC3A SCOPE FC4 Reapplication of IFRS 1 FC6A CONCEPTUAL FOUNDATIONS FC7 Useful information for users FC7 Comparability FC9 Current version of IFRSs FC11 OPENING IFRS STATEMENT OF FINANCIAL POSITION FC16 Recognition FC17 Derecognition in accordance with previous GAAP FC20 Measurement FC24 Exemptions from other IFRSs FC30 Other possible exemptions rejected FC64 Retroactive designation FC74 Estimates FC84 PRESENTATION AND DISCLOSURE FC85 Comparative information FC85 Historical summaries FC90 Explanation of transition to IFRSs FC91 Interim financial information FC96 Changes in accounting policies in the year of adoption FC97 SHORT-TERM EXEMPTIONS FROM IFRSs FC98 Removal of short-term exemptions (amendments issued in December 2016) FC99 APPENDIX Amendments to the Basis for Conclusions of other IFRSs IFRS 1 FC IFRS Foundation B31 Accounting Framework for General Warehouses of Deposit Resolution No. CD-SIBOIF-1026-1-NOV10-2017 IFRS Version 2017

Basis for Conclusions of IFRS 1 First-time Adoption of International Financial Reporting Standards These Basis for Conclusions accompany IFRS 1, but do not form part of it. In these Basis for Conclusions, the terminology has not been modified to reflect changes made by IAS 1 Presentation of Financial Statements (revised in 2007). The Basis for Conclusions have not been revised to reflect the restructuring of IFRS 1 in November 2008, but cross-references have been updated.

Introduction FC1 These Basis for Conclusions summarise the considerations by the International Accounting Standards Board (IASB) in arriving at the conclusions in IFRS 1 First-time Adoption of International Financial Reporting Standards. Each individual Board member weighed different factors to varying degrees. FC2 SIC-8 Application of International Accounting Standards as the Basis for Accounting, issued in 1998, dealt with the problems that arise when an entity first adopts IASs. In 2001, the Board began a project to revise SIC-8. In July 2002, the Board published Exposure Draft ED 1 First-time Adoption of International Financial Reporting Standards, with a comment period ending on 31 October 2002. The Board received 83 comment letters on Exposure Draft 1. IFRS 1 was issued by the Board in June 2003. FC2A IFRS 1 replaces SIC-8. The Board developed IFRS 1 to address issues regarding: (a) Some aspects of the SIC-8 requirement for full retrospective adoption caused costs that would likely exceed the benefits to users of financial statements. Furthermore, although SIC-8 did not require retrospective application when it was impracticable, it did not explain whether a first-time adopter of IFRSs should interpret this impracticability as a significant obstacle or a minor obstacle, nor did it specify any particular treatment in cases of impracticability. (b) SIC-8 might require a first-time adopter of IFRSs to apply two different versions of a standard if a new version had been issued during the periods covered by its first financial statements prepared under IASs and the new version prohibited retrospective application. (c) SIC-8 did not clearly state whether a first-time adopter of IFRSs should use retrospectivity when making recognition and measurement decisions retrospectively. (d) There were some doubts about how SIC-8 interacted with specific transitional provisions in individual standards.

IFRS 1 FC B32 IFRS Foundation Accounting Framework for General Warehouses of Deposit Resolution No. CD-SIBOIF-1026-1-NOV10-2017 IFRS Version 2017

FC2B Like SIC-8, IFRS 1 requires retrospective application in most areas. Unlike SIC-8: (a) It includes selected exemptions to avoid costs that would likely exceed the benefits to users of financial statements, as well as a small number of other exceptions due to practical reasons. (b) It clarifies that an entity will apply the most recent version of IFRSs. (c) It clarifies how the estimates made by a first-time adopter of IFRSs in accordance with IFRSs relate to estimates made for the same date in accordance with previous GAAP. (d) It specifies that the transitional provisions of other IFRSs are not applicable to a first-time adopter of IFRSs. (e) It requires improved disclosure about the transition to IFRSs. FC3 This project gained additional relevance due to the requirement that listed companies in the EU adopt IFRSs in their consolidated financial statements from 2005. Some other countries have announced that they will allow or require entities to adopt IFRSs in the coming years. Nevertheless, the Board's intention in developing IFRS 1 was to find solutions that were appropriate for an entity, anywhere in the world, regardless of whether adoption took place in 2005 or at another time.

Restructuring of IFRS 1 FC3A Since its issuance in 2003, IFRS 1 has been modified on numerous occasions to accommodate first-time adoption requirements arising from new IFRSs or amendments to them. Because of the way IFRS 1 was structured, these modifications made IFRS 1 more complex and less clear. The more modifications that were necessary, the worse this problem became. FC3B As part of its 2007 improvements project, the Board therefore proposed changing the structure of IFRS 1 without modifying its substance. Respondents to the exposure draft published in October 2007 supported the restructuring. The revised structure of IFRS 1 issued in November 2008 is easier for the reader to understand and is better designed to accommodate future changes. The essence of the restructuring was to move all specific exemptions and exceptions to IFRS requirements to appendices. Exemptions are classified into business combinations, exemptions, and short-term exemptions. Exemptions are applicable to all first-time adopters of IFRSs regardless of their transition date to IFRSs. Short-term exemptions are those exemptions applicable to users for a short period. Once those exemptions have expired, they will be removed.

IFRS 1 FC IFRS Foundation B33 Accounting Framework for General Warehouses of Deposit Resolution No. CD-SIBOIF-1026-1-NOV10-2017 IFRS Version 2017

Scope FC4 This IFRS applies to an entity that presents its first financial statements in accordance with IFRSs (first-time adopter). Some suggested that the entity should not be considered a first-time adopter if its previous financial statements already contained an explicit statement of compliance with IFRSs, except for some specific (and explicit) differences. They argued that an explicit statement of compliance establishes that the entity considers IFRSs as the basis of its accounting, even if it does not meet all the requirements of each IFRS. Some considered this argument to be particularly demanding in the case of an entity that met all the recognition and measurement requirements of IFRSs, but omitted some mandatory disclosures—for example, segment information required by IAS 14 Segment Reporting2 or the explicit statement of compliance with IFRSs required by IAS 1 Presentation of Financial Statements. FC5 To implement this approach, it would be necessary to establish how many differences are needed—and the degree of seriousness they must have—to conclude that the entity had not previously adopted IFRSs. In the Board's opinion, this would lead to a delicate situation of complexity and uncertainty. Furthermore, an entity should not be considered to have adopted IFRSs if it did not provide all the required disclosures, as such conduct would diminish the importance of disclosures and undermine efforts to promote full compliance with IFRSs. Therefore, IFRS 1 contains a simple test that provides an unambiguous answer: the entity has adopted IFRSs if, and only if, its financial statements contain a statement that is explicit and unreserved of compliance with IFRSs (paragraph 3 of IFRS 1). FC6 If the entity's financial statements in prior years contained this statement, all discrepancies with IFRSs will be errors, whether or not they were subject to disclosure. The entity will apply IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors to correct them.

Reapplication of IFRS 1 FC6A In the Improvements to IFRSs, 2009–2011 Cycle (issued in May 2012), the Board addressed a request for clarification on whether an entity can apply IFRS 1: (a) when it meets the criteria to apply IFRS 1 and has applied it in a prior period for which information is reported; or (b) when it meets the criteria to apply IFRS 1 and has applied IFRSs in a prior period for which information is reported when IFRS 1 did not exist. 2 In 2006, IAS 14 was replaced by IFRS 8 Operating Segments.

IFRS 1 FC B34 IFRS Foundation Accounting Framework for General Warehouses of Deposit Resolution No. CD-SIBOIF-1026-1-NOV10-2017 IFRS Version 2017

For example, an entity may have applied IFRS 1 in a prior period for which information is reported to comply with the requirements of a share placement in a foreign jurisdiction. Subsequently, the entity ceases to be listed and no longer presents financial statements in accordance with IFRSs. In a subsequent period for which information is reported, the information requirements in the entity's local jurisdiction may change from national GAAP to IFRSs. Consequently, the entity is again required to present its financial statements in accordance with IFRSs. FC6B The Board highlighted that the scope of IFRS 1 focuses on whether an entity's financial statements are its first IFRS financial statements (a term defined in Appendix A). If an entity's financial statements meet the definition of "the first IFRS financial statements," the entity is required to apply IFRS 1 in accordance with paragraph 2(a). However, the use of the term "first" raises the question of whether IFRS 1 can be applied more than once. FC6C In the June 2011 discussion paper, the Board proposed clarifying that an entity is required to apply IFRS 1 when the most recent prior annual financial statements do not contain an explicit and unreserved statement of compliance with IFRSs, even if the entity has applied IFRS 1 in a period for which information is reported prior to the period presented in the most recent prior annual financial statements. However, in light of comments from respondents to the June 2011 discussion paper, the Board decided that an entity that meets the criteria to apply IFRS 1 and has applied IFRSs in a prior period for which information is reported (regardless of whether it used IFRS 1 or SIC-8 Application of International Accounting Standards as the Basis for Accounting, depending on the timing of the previous adoption) may elect to apply IFRS 1 when it readopts IFRSs. The Board decided that the entity should be permitted, rather than required, to apply IFRS 1 because, as stated in paragraph IN5 of IFRS 1, IFRS 1 grants limited exemptions from some IFRS requirements, on the basis that the cost of complying with some IFRSs would likely exceed the benefits to users of financial statements. However, the costs of applying IFRSs in their entirety may not exceed the benefits of doing so for an entity that has previously applied IFRSs. Consequently, the Board concluded that an entity returning to IFRSs could determine that the benefits of applying IFRSs as if it had continued to do so without interruption would exceed the costs of preparing this information, and that an entity should not be prohibited from following that approach. When applying this approach, an entity should apply IFRSs retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors as if it had never ceased to apply them. The Board highlighted that an entity does not make retrospective assessments when preparing financial statements in accordance with IFRSs if it is applying IFRS 1, or if it applies IFRSs retrospectively as if it had never ceased to apply them in accordance with IAS 8. The Board highlighted that paragraphs 14–17 of IFRS 1 and paragraph 53 of IAS 8 provide guidance in this regard.

IFRS 1 FC IFRS Foundation B35 Accounting Framework for General Warehouses of Deposit Resolution No. CD-SIBOIF-1026-1-NOV10-2017 IFRS Version 2017

FC6D The Board also highlighted that, in accordance with paragraph 2 of IFRS 1, an entity that has never previously applied IFRSs would continue to be required to apply IFRS 1 in its first financial statements in accordance with IFRSs. FC6E The Board also decided that the entity will disclose the reason why it ceased to apply IFRSs and the reason why it resumes reporting in accordance with them. The Board considers that this disclosure requirement provides useful information to users and would discourage the intentional omission of the statement of compliance with IFRSs solely to allow an entity to take advantage of the exemptions in IFRS 1. The Board also decided that an entity that elects not to apply IFRS 1 will explain the reasons why it has chosen to apply IFRSs as if it had never ceased to apply them. The Board considers that disclosing this information ensures that useful information will be provided to users.

Conceptual Foundations Useful information for users FC7 In developing the recognition and measurement requirements for an entity's opening IFRS statement of financial position, the Board was guided by the objective of financial statements, as established in the Conceptual Framework for Financial Reporting. The Conceptual Framework3 establishes that the objective of financial statements is to provide information about the financial position, performance, and changes in financial position of the entity, that is useful to a wide range of users in making their economic decisions. FC8 The Conceptual Framework identifies four qualitative characteristics that make the information contained in financial statements useful to users. In summary, the information must be: (a) Easily understandable by users. (b) Relevant to the needs of users in making decisions. (c) Reliable, in other words, the financial statements must: (i) faithfully represent the transactions and other events that they purport to represent or that can reasonably be expected to represent; (ii) represent transactions and other events in accordance with their substance and economic reality, and not merely their legal form; (iii) be neutral, i.e., free from bias; 3 References to the Conceptual Framework are to the IASC Framework for the Preparation and Presentation of Financial Statements, adopted by the IASB in 2001. In September 2010, the IASB replaced the Conceptual Framework with the Conceptual Framework for Financial Reporting.

IFRS 1 FC B36 IFRS Foundation Accounting Framework for General Warehouses of Deposit Resolution No. CD-SIBOIF-1026-1-NOV10-2017 IFRS Version 2017

(iv) take into account the uncertainties that inevitably surround many events and circumstances, by exercising prudence; (v) be complete, within the reasonable limits imposed by relative importance and cost. (d) Comparable with information provided by the entity in its financial statements over time, and with information provided in the financial statements of other entities.

Comparability FC9 The previous paragraph emphasizes the need for comparability. Ideally, the first-time adoption regime of IFRSs would achieve comparability: (a) with the same entity over time; (b) between different entities first adopting IFRSs; and (c) between entities first adopting IFRSs and entities that are already applying IFRSs. FC10 SIC-8 prioritized ensuring comparability between the first-time adopter and entities already applying IASs. It was based on the principle that the first-time adopter should comply with the same Standards as the entity already applying IASs. However, the Board decided that it is more important to achieve comparability over time with the first IFRS financial statements of an entity adopting IFRSs for the first time and between different entities adopting IFRSs for the first time on a given date; achieving comparability between entities first adopting IFRSs and entities already applying them is a secondary objective.

Current version of IFRSs FC11 Paragraphs 7–9 of IFRS 1 require that a first-time adopter of IFRSs apply the