The rebuttable position for most assets and liabilities on transition to EU IFRS, FRS 101 or FRS 102 is that they are restated to reflect all requirements on a fully retrospective basis. However, there are a number of available exemptions from this which provide practical reliefs from potentially tortuous analysis of past transactions. These include in particular:

• Exemptions from re-measuring past business combinations
• The ability to regard revalued amounts carried forward from previous GAAP or fair value at the date of transition as “deemed cost” and apply cost accounting going forward
• The ability to assess relevant facts and circumstances relating to arrangements potentially containing an embedded lease at the date of transition rather than at the inception of the arrangements
• The ability to elect to commence capitalising borrowing costs, as part of a qualifying asset, only from the date of transition.