Classification of Liabilities – International Accounting Standards Board
At its meeting on March 12-14, 2019, the IASB continued its discussion of comments on the Exposure Draft, which proposes amendments to paragraphs 69–76 of IAS 1. The Board tentatively decided to clarify the IAS 1 requirements for classifying liabilities with equity-settlement features and asked the staff to perform focused consultation to obtain a better understanding of the practical effect of these clarifications. At a previous meeting, the Board had tentatively decided to clarify in IAS 1 that, in assessing an entity’s right to defer settlement of a liability, compliance with any conditions in a lending agreement should be assessed as at the reporting date, even if the lender will not test the entity’s compliance until a later date. At this meeting, the Board tentatively decided not to add further guidance on how to test compliance with conditions linked to the entity’s financial performance. The Board will discuss transition arrangements and review the due process on this project.
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