When preparing its first IFRS financial statements as at 31 December 20X7, Company A should:

A. Estimates should be reassessed to reflect the conditions under IFRS and any new information available. This is in line with the principle that when adopting IFRS for the first time, the entity should adjust its accounting estimates to align with the requirements of the new reporting framework and consider any new information that has become available since the previous financial statements were prepared.

B. Deferred tax should be restated, based on conditions as they were perceived at the time of the earlier financial statements. This is consistent with the requirement to use the same accounting policies and estimates consistently in the transition to IFRS, which includes reassessing deferred tax liabilities and assets based on the understanding of tax conditions and rates at the time those earlier statements were prepared, not just the latest rates.

C. Retrospective application is not optional; according to IFRS 1, a company must apply IFRS retrospectively in its entirety unless it is impracticable to do so. However, retrospective application is generally required for comparability and consistency in financial reporting.

Therefore, the correct statement regarding first-time adoption of IFRS is a combination of A and B: the company should reassess estimates and restate deferred tax liabilities and assets based on the conditions prevailing at the time of the earlier financial statements, and it must apply IFRS retrospectively unless it is impracticable.