IAS 1 — Classification of debt with covenants as current or non-current
Background
In January 2020, the Board issued Classification of Liabilities as Current or Non-current, which amended IAS 1 Presentation of Financial Statements. The amendments clarified how an entity classifies debt and other financial liabilities as current or non-current in particular circumstances. The amendments are effective for annual reporting periods beginning on or after 1 January 2023, with earlier application permitted.
In December 2020, the IFRS Interpretations Committee published a tentative agenda decision in response to informal feedback and enquiries about how an entity applies the amendments to particular fact patterns. After considering feedback to its tentative agenda decision, the Committee handed the matter over to the IASB as that feedback provided information about situations the Board did not specifically consider when developing the 2020 amendments.
In response to that new information, the Board tentatively decided to amend IAS 1 with respect to classification (as current or non-current), presentation and disclosures of liabilities for which an entity’s right to defer settlement for at least 12 months is subject to the entity complying with conditions after the reporting period.
Current status of the project
This project has been completed. The IASB issued Non-current Liabilities with Covenants (Amendments to IAS 1) on 31 October 2022.
Project milestones
| Date | Development | Comments |
|---|---|---|
| June 2021 | Issue first discussed by the IASB | |
| 19 November 2021 | ED/2021/9 Non-current Liabilities with Covenants (Proposed amendments to IAS 1) published | Comments requested by 21 March 2022 |
| 31 October 2022 | Non-current Liabilities with Covenants (Amendments to IAS 1) issued | The amendments are effective for annual reporting periods beginning on or after 1 January 2024 |
