BC24 The Board considered whether it should require a first‑time adopter to measure all assets and liabilities at fair value in the opening IFRS balance sheet. Some argued that this would result in more relevant information than an aggregation of costs incurred at different dates, or of costs and fair values. However, the Board concluded that a requirement to measure all assets and liabilities at fair value at the date of transition to IFRSs would be unreasonable, given that an entity may use an IFRS‑compliant cost‑based measurement before and after that date for some items.

BC25 The Board decided as a general principle that a first‑time adopter should measure all assets and liabilities recognised in its opening IFRS balance sheet on the basis required by the relevant IFRSs. This is needed for an entity’s first IFRS financial statements to present understandable, relevant, reliable and comparable information.

Benefits and costs

BC26 The Framework acknowledges that the need for a balance between the benefits of information and the cost of providing it may constrain the provision of relevant and reliable information. The Board considered these cost‑benefit constraints and developed targeted exemptions from the general principle described in paragraph BC25. SIC‑8 did not include specific exemptions of this kind, although it provided general exemptions from:

(a) retrospective adjustments to the opening balance of retained earnings ‘when the amount of the adjustment relating to prior periods cannot be reasonably determined’.