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Classification of Liabilities as Current or Non-current (Amendments to IAS 1) [Completed]

Effective date:

The changes in Clas­si­fi­ca­tion of Li­a­bil­i­ties as Cur­rent or Non-cur­rent — De­fer­ral of Ef­fec­tive Date (Amend­ment to IAS 1) de­fer the ef­fec­tive date of the January 2020 Clas­si­fi­ca­tion of Li­a­bil­i­ties as Cur­rent or Non-Cur­rent (Amend­ments to IAS 1) to an­nual re­port­ing pe­ri­ods be­gin­ning on or af­ter Jan­u­ary 1, 2023. Ear­lier ap­pli­ca­tion of the Jan­u­ary 2020 amend­ments con­tinues to be per­mit­ted.

Last updated:

October 2020

Overview

This issue was originally addressed as part of the annual improvements project 2010 -2012 cycle. Exposure Draft ED/2012/1 Annual Improvements to IFRSs (2010—2012 Cycle), published in May 2012, proposed amendments to IAS 1.73 to clarify that a liability is classified as non-current if an entity expects, and has the discretion, to refinance or roll over an obligation for at least twelve months after the reporting period under an existing loan facility with the same lender, on the same or similar terms. During 2013, however, the IASB decided not to finalize the amendment, but instead pursue a narrow-scope project to refine the existing guidance in IAS 1 on when liabilities should be classified as current.

In February 2015, the Board published its proposals in the Exposure Draft  ED/2015/1 Classification of Liabilities (Proposed amendments to IAS 1). The Board discussed feedback on the ED from December 2015 to September 2019, pausing the project between 2016 and 2018 while it finalized revisions to the definition of a liability in the Conceptual Framework. As a result of these discussions, the Board made no fundamental changes to the proposed amendments but decided to clarify some aspects of them.

The final amendments, issued by the IASB on January 23, 2020, in Classification of Liabilities as Current or Non-Current (Amendments to IAS 1) affect only the presentation of liabilities in the statement of financial position — not the amount or timing of recognition of any asset, liability income or expenses, or the information that entities disclose about those items. They:

  • clarify that the classification of liabilities as current or non-current should be based on rights that are in existence at the end of the reporting period and align the wording in all affected paragraphs to refer to the "right" to defer settlement by at least twelve months and make explicit that only rights in place "at the end of the reporting period" should affect the classification of a liability;
  • clarify that classification is unaffected by expectations about whether an entity will exercise its right to defer settlement of a liability; and
  • make clear that settlement refers to the transfer to the counterparty of cash, equity instruments, other assets or services.

The AcSB approved these amendments to IAS 1 and included them in the CPA Canada Handbook – Accounting Part I on April 1, 2020.

The IASB published a second exposure draft Classification of Liabilities as Current or Non-current — Deferral of Effective Date (Proposed amendment to IAS 1) proposing to defer the effective date of the January 2020 amendments to IAS 1 by one year to annual reporting periods beginning on or after January 1, 2023.

On July 15, 2020, the IASB issued Clas­si­fi­ca­tion of Li­a­bil­i­ties as Cur­rent or Non-cur­rent — De­fer­ral of Ef­fec­tive Date (Amend­ment to IAS 1) de­ferring the ef­fec­tive date of the Jan­u­ary 2020 amend­ments to IAS 1 by one year to an­nual re­port­ing pe­ri­ods be­gin­ning on or af­ter Jan­u­ary 1, 2023. Ear­lier ap­pli­ca­tion of the Jan­u­ary 2020 amend­ments con­tinues to be per­mit­ted.

The AcSB ap­proved this further amend­ment to IAS 1 and in­cluded it in the CPA Canada Hand­book – Ac­count­ing Part I on October 1, 2020.

 

Other developments

October 2020

On October 1, 2020, the AcSB included the amendment deferring the effective date of the January 2020 amendments to IAS 1 in Part I of the CPA Canada Hand­book – Ac­count­ing. Classification of Liabilities as Current or Non-current is now effective for annual reporting periods beginning on or after January 1, 2023. Earlier application is permitted.

June 2020

On July 15, 2020, the IASB issued Clas­si­fi­ca­tion of Li­a­bil­i­ties as Cur­rent or Non-cur­rent — De­fer­ral of Ef­fec­tive Date (Amend­ment to IAS 1). 

May 2020

On May 6, 2020, the AcSB issued its exposure draft that corresponds to the IASB’s Exposure Draft on this topic. In response to COVID-19, the exposure draft proposes to defer the effective date of the amendments to annual reporting periods beginning on or after January 1, 2023. Comments are requested by June 3, 2020.

On May 4, 2020, the IASB published an exposure draft Classification of Liabilities as Current or Non-current — Deferral of Effective Date (Proposed amendment to IAS 1) proposing to defer the effective date of the January 2020 amendments to IAS 1 by one year. Comments are requested by June 3, 2020.

April 2020

On April 17, 2020, IASB staff updated the Work Plan to indicate that the Board plans to issue an Exposure Draft in May 2020 which, as a result of the Covid-19 pandemic, will propose delaying the effective date of the amendments by one year to annual reporting periods beginning on or after January 1, 2023.

On April 1, 2020, the AcSB included these amendments to IAS 1 in the CPA Canada Handbook – Accounting Part I.

January 2020

On January 23, 2020, the IASB issued Classification of Liabilities as Current or Non-Current (Amendments to IAS 1) providing a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date.

November 2019

On November 25, 2019, the IASB staff updated the Work Plan to indicate that the Board plans to issue the Amendments to IAS 1 in January 2020.

October 2019

On October 1, 2019, the IASB staff updated the work plan to indicate that the Board expects to issue the final IFRS amendments to IAS 1 in Q1/2020.

July 2019

On July 29, 2019, the IASB staff updated the work plan to indicate that the Board expects to issue the amendments to IAS 1 in Q4/2019.

March 2019

On March 14, 2019, the IASB staff updated the work plan to indicate that the Board will issue the Amendments to IAS 1 in the second half of 2019.

September 2018

On September 20, 2018, the IASB staff updated the work plan to indicate that the Board plans to issue an IFRS amendment (no date/timing specified for this).

July 2018

On July 18, 2018, the IASB staff updated the work plan to indicate that the Board plans to decide the project direction in September 2018.

May 2018

On May 25, 2018, the IASB staff updated the work plan to indicate that the Board expects to issue the final amendments to IAS 1 in Q3/2018.

September 2017

On September 22, 2017, the IASB staff updated the work plan to indicate that the IASB expects to issue the final amendments to IAS 1 in the 2nd half of 2018.

June 2017

In June 2017, the IASB staff updated the work plan to indicate that the IASB expects to issue the final amendments to IAS 1 in the 1st half of 2018. 

March 2017

On March 23, 2017, the IASB staff issued an updated Work Plan which indicates that the IASB expects to publish the final amendments to IAS 1 after September 2017.

December 2016

On December 15, 2016, the IASB staff updated the Work Plan in respect of this project to indicate that the IASB expects to publish the final amendments to IAS 1 after June 2017.

September 2016

On September 23, 2016, the IASB staff updated the Work Plan in respect of this project to indicate that the IASB expects to publish the final amendments to IAS 1 sometime after March 31, 2017.

July 2016

On July 20, 2016, the IASB staff updated the Work Plan in respect of this project to indicate that the IASB expects to publish the final amendments to IAS 1 sometime after January 31, 2017. 

March 2016

On March 18, 2016, the IASB updated its Work Plan in respect of this project to note that it is currently drafting the final amendments, which it expects to issue sometime after September 30, 2016.

January 2016

On January 22, 2016, the IASB staff updated the Work Plan to advise that the IASB expects to issue the final amendments in Q2 2016.

March 2015

On March 11, 2015, the AcSB issued an ED that corresponds to the IASB’s ED on this topic.

February 2015

On February 10, 2015, the IASB has published an ED of proposed amendments to IAS 1, Presentation of Financial Statements.

 

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