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IAS 1 — Classification of liabilities

Background

This project seeks to develop a more general approach to the classification of liabilities under IAS 1 Presentation of Financial Statements, which is based on the contractual arrangements in place at the reporting date.

This project arose out of the annual improvements project 2010 -2012 cycle. Exposure Draft ED/2012/1 Annual Improvements to IFRSs (2010—2012 Cycle), published in May 2012, proposed the following amendments to paragraph 73 of IAS 1:

If an entity expects, and has the discretion, to refinance or roll over an obligation for at least twelve months after the reporting period under an existing loan facility with the same lender, on the same or similar terms, it classifies the obligation as non-current, even if it would otherwise be due within a shorter period. ...

During 2013, the IASB decided not to finalise the amendment, but instead pursue a narrow-scope project to refine the existing guidance in IAS 1 on when liabilities should be classified as current.

Some of the matters which may be considered in this project include:

  • impacts of syndicated lending on classification
  • linkage of settlement of the liability with cash outflows
  • the significance of management’s expectations in the classification of liabilities.

 

Current status of the project

This project was formally added to the IASB's agenda in February 2014. The IASB published Exposure Draft ED/2015/1 Classification of Liabilities (Proposed amendments to IAS 1) on 10 February 2015 with a comment deadline of 10 June 2015.

 

Project milestones

DateDevelopmentComments
3 May 2012 Exposure Draft ED/2012/1 Annual Improvements to IFRSs (2010—2012 Cycle) published Comment deadline 5 September 2012
March 2013 IASB agrees to pursue the suggested amendments to IAS 1 as a narrow-scope project in its own right
10 February 2015 Exposure Draft ED/2015/1 Classification of Liabilities (Proposed amendments to IAS 1) published
Comments requested by 10 June 2015

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