Supplier finance arrangements
Background
The IFRS Interpretations Committee received a submission about supply chain finance arrangements asking:
- How an entity presents liabilities to pay for goods or services received when the related invoices are part of a supply chain finance (or reverse factoring) arrangement; and
- what information about reverse factoring arrangements an entity is required to disclose in its financial statements.
In response to that submission, the Committee published an agenda decision in December 2020. However, feedback and input received — in particular from investors and analysts — suggested the information entities provide about supplier finance arrangements applying existing IFRS requirements does not meet all investor information needs.
In response to that feedback, the Board tentatively decided to amend IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures to add disclosure requirements, and ‘signposts’ within existing disclosure requirements, that would ask entities to provide qualitative and quantitative information about supplier finance arrangements.
Current status of the project
This project has been completed. The IASB issued Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7) on 25 May 2023.
Project milestones
| Date | Development | Comments |
|---|---|---|
| June 2021 | Issue first discussed by the IASB | |
| 26 November 2021 | ED/2021/10 Supplier Finance Arrangements (Proposed amendments to IAS 7 and IFRS 7) published | Comments requested by 28 March 2022 |
| 25 May 2023 | Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7) issued | Effective for for annual reporting periods beginning on or after 1 January 2024 |
