This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice (http://www2.deloitte.com/ca/en/legal/cookies.html) for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

FASB proposes amendments to classification of debt that would bring US GAAP and IFRSs closer together

  • FASB (US Financial Accounting Standards Board) (lt blue) Image

Sep 12, 2019

On September 12, 2019, the US standard-setter FASB issued a revised version of its proposed Accounting Standards Update (ASU) "Simplifying the Classification of Debt in a Classified Balance Sheet (Current Versus Noncurrent)." Comments are requested by October 28, 2019.

The proposed amendments would make US GAAP more consistent with IFRSs, especially with IAS 1 Presentation of Financial Statements that includes guidance on the classification of liabilities. The exposure draft notes that FASB leveraged IAS 1 guidance when developing its proposals for the classification of debt. Furthermore, the FASB’s decision on applying the debt classification principle to post-balance-sheet refinancings of debt is consistent with the guidance in IAS 1. However, differences would still remain between US GAAP and IFRSs for classifying debt arrangements with covenant violations.

The IASB currently has a project on its agenda to amend IAS 1 that is specifically related to the classification of liabilities. Final amendments to IAS 1 are currently expected in the fourth quarter of 2019.

Review the press release and exposure draft on the FASB's website.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.