The International Accounting Standards Board (IASB) is consulting on proposed amendments to IAS 1, Presentation of Financial Statements, with the aim of clarifying how entities classify debt, particularly when it is coming up for renewal.
The proposed amendments are designed to introduce a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date.
ED/2015/1 Classification of Liabilities (Proposed amendments to IAS1) aims to clarify 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; and at making clear the link between the settlement of the liability and the outflow of resources from the entity.
The ED does not include a proposed effective data, but says the amendments would be applied retrospectively and that early application would be permitted.
Comments on the proposed amendments should be sent to the IASB by 10 June 2015.
