Accounting Alerts

IASB Defers the Effective Date of IAS 1 Amendments

This Accounting Alert is issued to circulate the deferral of amendments to IAS 1 by the International Accounting Standards Board (IASB).

Executive Summary

The IASB has issued an amendment to defer by one year the effective date of IAS 1 (Amendments), Presentation of Financial Statements - Classification of Liabilities as Current or Non-current. The amendments to IAS 1 was issued in January 2020, previously effective for annual reporting periods beginning on or after January 1, 2022, to clarify the Standard's guidance on whether a liability should be classified as either current or non-current. Specifically, the amendments:

  • clarify that the classification of a liability as either current or non-current is based on the entity's rights at the end of the reporting period;
  • state that management's expectations around whether they will defer settlement or not does not impact the classification of the liability;
  • add guidance about lending conditions and how these can impact classification; and,
  • include requirements for liabilities that can be settled using an entity's own instruments.

In response to the COVID-19 pandemic, the IASB deferred the effective date by one year to provide companies with more time to implement any classification changes resulting from those amendments. As such, the amendments are now effective for annual reporting periods beginning on or after January 1, 2023.

No other changes have been made to the amendments other than the effective date.

 

See attached Accounting Alert.