The exposure draft adds disclosure requirements, and ‘signposts’ within existing disclosure requirements, that would ask entities to provide qualitative and quantitative information about supplier finance arrangements.

The UKEB supports the proposals in the ED highlighting that they will improve transparency about the use of supplier finance arrangements and enhance the ability of users of financial statements to assess the effects of those arrangements on an entity’s liabilities and cash flows, as well as on its liquidity risk and risk management.  To enhance the proposals the UKEB recommends:

• that specific requirements be added to enable users to understand the magnitude of an entity's supplier finance arrangements.  The UKEB recommends that there should be specific requirements for an entity to disclose its accounting policy for the presentation of cash flows that are part of supplier finance arrangements; the amounts of those cash flows; and the line item(s) in the Statement of Cash Flows where they are presented.
• that the proposed amendment in paragraph IG18 of IFRS 7, currently proposed only for the Implementation Guidance, be incorporated as part of the specific disclosure requirements in the Standard to ensure it is given appropriate prominence.

Comments on the draft comment letter are requested by 4 March 2022.

The press release, the draft comment letter and the invitation to comment are available on the UKEB website.