Amendments to classification of liabilities deferred by one year

The International Accounting Standards Board (IASB) has deferred the amendments to IAS 1 Presentation of Financial Statements relating to classification of liabilities as current or non-current. Originally due to be effective for annual periods commencing on or after 1 January 2022, the new requirements will only apply from 1 January 2023.

The amendments apply retrospectively and so may require restatement of liabilities classified as current or non-current in the comparative balance sheets for years ending 31 December 2022 or 30 June 2023.

The IASB noted pressures caused by the COVID-19 pandemic as the reason for the deferral, including:

  • Making it challenging for entities to implement the changes in classification of liabilities, and
  • Delays and extended durations of renegotiations to loan covenants required as a result of the amendments.

However, in deferring these amendments, the IASB did note that the amendments clarify, but do not fundamentally change, the classification requirements.

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