What does IFRS 1 require an entity to present at the date of transition to IFRS?

The requirement set forth by IFRS 1, "First-time Adoption of International Financial Reporting Standards," mandates that an entity must present an opening IFRS statement of financial position at the date of transition to IFRS. This statement serves as a critical starting point for entities moving from their previous Generally Accepted Accounting Principles (GAAP) to the IFRS framework.

The opening IFRS statement of financial position is essential because it reflects the entity’s financial position under IFRS at the transition date. This document must disclose all assets and liabilities, ensuring that the transition is transparent and that users of the financial statements can understand how the move to IFRS has affected the entity's reported financial position.

By requiring this statement, IFRS 1 aims to provide a clear baseline for comparability with subsequent financial statements prepared under IFRS. It effectively sets out how the past financial information adjusts to align with IFRS standards, ensuring consistency and transparency across reporting periods.

Other options such as requiring an annual financial audit, a retrospective financial report, or a disclosure statement about accounting changes do not meet the specific requirements highlighted in IFRS 1 in the same way as the opening IFRS statement of financial position. The focus of IFRS 1 is primarily on establishing a