The information entities currently provide about supplier finance arrangements falls short of meeting investor information needs, the IASB said. Users of financial statements want to understand the effects of these arrangements on an entity’s liabilities and cashflows, as well as on liquidity risk and risk management.

The proposed targeted amendments to the current disclosure requirements are designed to meet investors’ demands for more detailed information to help them analyse and understand the effects of such arrangements.

These proposals would amend IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures.