5.9 Other Considerations

First-time adoption of IFRS Accounting Standards

The guidance provides procedures that an entity must follow when it adopts IFRS Accounting Standards for the first time as the basis for preparing its general purpose financial statements. The standards impose a number of mandatory exceptions and grant a number of optional exemptions from the general requirement to comply with each IFRS Accounting Standard effective at the end of the entity’s first IFRS Accounting Standards reporting period.

No such procedures are provided.

Interim financial reporting — cost allocation

As indicated in IAS 34, a "cost that does not meet the definition of an asset at the end of an interim period is not deferred in the statement of financial position either to await future information as to whether it has met the definition of an asset or to smooth earnings over interim periods within a financial year."

If a specific cost or expense item charged to expense for annual reporting purposes benefits more than one interim period, the cost or expense item may be allocated to those interim periods.

Government grants

IFRS Accounting Standards provide guidance on the recognition and measurement of government grants (including below-market government loans), along with disclosure requirements for government grants and other forms of government assistance.

Generally, grants are recognized when there is reasonable assurance that the related conditions will be met and the grants will be received, with related profit or loss recorded on a systematic basis depending on the type of grant.

No explicit guidance is provided related to the recognition and measurement of government grants or other forms of government assistance other than industry guidance for not-for-profit entities. Some companies follow the approach outlined in ASC 958-605 (contribution model) or in IAS 20 (grant model) by analogy, but there is diversity in practice.

Subsequent events — evaluation date

An entity must evaluate subsequent events through the date the financial statements are authorized for issuance.

An entity must evaluate subsequent events through the date the financial statements are issued or available to be issued.

Reference rate reform

To ease the transition to alternative benchmark interest rates, the guidance includes mandatory exceptions to certain guidance related to contract modifications (i.e., for contracts involving financial instruments and leases as well as other contracts) and hedge accounting. There is no fixed end date.

To ease the transition to alternative benchmark interest rates, the guidance provides optional exceptions to certain guidance related to contract modifications (i.e., for contracts involving financial instruments and leases as well as other contracts), hedge accounting, sales or transfers of HTM securities, and reassessments of embedded derivatives. There is a fixed end date (December 31, 2024).