CHAPTER 30: PFRS 1 First Time Adoption of PFRS

First Time Adopter

A first time adopter is an entity that presents for the first time its financial statements in conformity with
Philippine Financial Reporting Standards.

First PFRS financial statements

The first PFRS financial statements are the first annual statements in which an entity adopts PFRS by an
explicit and unreserved statement of compliance with PFRS.

Financial statements presented by an entity in the current year would qualify as first PFRS financial
statements under the following conditions:

1. When an entity presented its most recent previous financial statements:

a. Under national GAAP inconsistent with PFRS in all respects.

b. In conformity with PFRS in all respects but these statements did not contain an explicit and
unreserved statement of compliance with PFRS.
c. Containing an explicit statement of compliance with some but not all PFRS.
d. Under national GAAP with a reconciliation of selected figures to amounts determined under
PFRS.

2. When an entity prepared financial statements in the previous period under PFRS but the
financial statements were for internal use only.

3. When an entity prepared financial statements in the previous period under PFRS for
consolidation purposes without preparing a complete set of financial statements.

4. When an entity did not present financial statements in the previous period.

Date transition to PFRS

The date of transition to PFRS refers to the beginning of the earliest period for which an entity presents
full comparative information under P FRS in its first PFRS financial statements.

The date of transition to PFRS depends on two factors, namely:

a. The date of adoption of PFRS

b. The number of years of comparative information that an entity decides to present together with
the financial statements in the year of adoption

Illustration

An entity presented its most recent financial statements under previous GAAP on December 31, 2020.

The entity decided to adopt PFRS on December 31, 2021 and to present a one-year comparative
information for 2020.
The beginning of the earliest period for which the entity should present full comparative information
would be January 1, 2020.

In this case, the opening PFRS statement of financial position would be dated January 1, 2020.

However, if the entity decided to present two-year comparative information for 2019 and 2020, the
beginning of the earliest period for which the entity should present full comparative information would
be January 1, 2019.

In this case, the opening PFRS statement of financial position would be dated January 1, 2019.