IFRS 1 applies to an entity that presents its first IFRS financial statements. It specifies the requirements that an entity must follow when it first adopts IFRS as the basis for preparing its general-purpose financial statements. IFRS 1 refers to these entities as first-time adopters. Although IFRS is considered a principles-based framework, the provisions of IFRS 1 are rules-based and must be followed as written. The standard is quite complex and companies in transition to IFRS must carefully analyze it in order to determine the most appropriate accounting treatment and take advantage of an opportunity to reassess all financial reporting. Optional exemptions from the retrospective application of other IFRS are granted on first-time adoption in specific areas where the cost of complying with the requirements of IFRS 1 would be likely to exceed the benefits to users of financial statements or where the retrospective application is impractical.