The IASB published the exposure draft 'Non-current Liabilities with Covenants (Proposed amendments to IAS 1)' in November 2021 to clarify how conditions with which an entity must comply within twelve months after the reporting period affect the classification of a liability. 

The UKEB sup­ports a number of the proposals con­tained within the ED but high­lights the fol­low­ing concerns:

• The UKEB does not support the specific requirement for separate presentation in the Statement of Financial Position (paragraph 76ZA (a) of the ED) as it believes that the current general requirements in IAS 1 Presentation of Financial Statements are sufficient.
• The potential for unintended consequences of the some of the ED's proposals especially regarding the meaning of 'specified conditions' in paragraph 72B and the application of paragraph 72C(b) when determining if a liability is current.  The UKEB has encountered significant diversity in interpreting the intent of paragraph 72C(b) and suggests that paragraph 72C be deleted.

Com­ments are re­ques­ted by 07 March 2022. 

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