BC20 An entity may have derecognised financial assets or financial liabilities in accordance with its previous GAAP that do not qualify for derecognition in accordance with IAS 39 [IFRS 9 Financial Instruments replaced IAS 39. IFRS 9 applies to all items that were previously withinthe scope of IAS 39.]. ED 1 proposed that a first‑time adopter should recognise those assets and liabilities in its opening IFRS balance sheet. Some respondents to ED 1 requested the Board to permit or require a first‑time adopter not to restate past derecognition transactions, on the following grounds:
(a) Restating past derecognition transactions would be costly, especially if restatement involves determining the fair value of retained servicing assets and liabilities and other components retained in a complex securitisation. Furthermore, it may be difficult to obtain information on financial assets held by transferees that are not under the transferor’s control.
(b) Restatement undermines the legal c
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