UKEB publishes its Draft Endorsement Criteria Assessment on narrow scope amendments to IAS 1

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05 Jun, 2023

The UK Endorsement Board (UKEB) has published a joint Draft Endorsement Criteria Assessment (DECA) which assesses whether 'Classification of Liabilities as Current or Non-current — Amendments to IAS 1', issued by the International Accounting Standards Board (IASB) in January 2020, and 'Non-current Liabilities with Covenants —Amendments to IAS 1', issued by the IASB in October 2022, meet the UK's statutory requirements for adoption of IFRS accounting standards as set out in Statutory Instrument 2019/685.

The amendment 'Classification of Liabilities as Current or Non-current (Amendments to IAS 1)' provides a more general approach to the classification of liabilities under IAS 1 based on the contractual arrangements in place at the reporting date.

The amendment 'Non-current Liabilities with Covenants (Amendments to IAS 1)' clarify how conditions with which an entity must comply within twelve months after the reporting period affect the classification of a liability.

Both Amendments have an effective date of 1 January 2024, with earlier application permitted.

The UKEB's draft assessment concludes that:

  • the Amendments, if applied jointly, meet the criteria of relevance, reliability, comparability and understandability required of the financial information needed for making economic decisions and assessing the stewardship of management, as required by SI 2019/685 (see Regulation 7(1)(c)); and 
  • application of the Amendments is not contrary to the principle that an entity’s accounts must give a true and fair view as required by SI 2019/685 (see Regulation 7(1)(a)).

Additionally the UKEB tentatively concludes that the Amendments are likely to be conducive to the long-term public good in the UK.

Comments on the draft Endorsement Criteria Assessment are requested by 8 June 2023.

For more information, see the Invitation to Comment and draft Endorsement Criteria Assessment on the UKEB's website.

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