Presentation of Financial Statements (IAS 1/AASB 101)

Corporate Reporting Insights

BDO's monthly newsletter, Corporate Reporting Insights, keeps you up to date with the latest Australian and global developments in corporate financial and sustainability reporting.

• Entities may have to reclassify their borrowings at 31 December 2024 – Part 2 (April 2024) *
• Meaning of ‘settlement’ when classifying liabilities as current or non-current (April 2024) *
• IFRS 18 is here - Your primary financial statements will look different from 2027 (April 2024)
• Entities may have to reclassify their borrowings at 31 December 2024 (March 2024) *
• AASB approves changes to the classification requirements for liabilities as current or non-current (February 2023) *
• New rules for classifying liabilities from 1 January 2024 (November 2022) *
• Eight ways to make your financial statements say what they mean (March 2022)
• More changes proposed for classifying liabilities as current or non-current (December 2021)​ *
• Latest IFRIC agenda decisions – Costs necessary to sell inventories & non-going concern financial statements​ (July 2021)​
• How to account for reverse factoring/supply chain financing arrangements (April 2021)
• Are your borrowings classified correctly as current or non-current liabilities? (March 2021)
• Expect to see a reduction in the amount of accounting policy disclosures​ (March 2021)
• Amendments to classification of liabilities deferred by one year​​ (August 2020) *
• Changes to IAS 1 – Classification of borrowings as current vs. non-current may change for some entities (Feb 2020) *
• IASB amends definition of 'material' (Nov 2018)
• Blind Freddy - Common errors in presentation of financial statements - Part 3 (June 2017)
• Blind Freddy - Common errors in presentation of financial statements - Part 2 (May 2017)
• Blind Freddy - Common errors in presentation of financial statements - Part 1​ (April 2017).

* These articles deal with amendments to AASB 101 that may, for annual periods beginning on or after 1 January 2024, affect whether entities classify their liabilities as current or non-current. The amendments are contained in amending standard AASB 2020-1 Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-current and AASB 2022-6 Amendments to Australian Accounting Standards - Non-current Liabilities with Covenants (issued December 2022), which incorporates some but not all, of the proposals contained in ED 316 (refer to IFRB 2021-13 for details of the ED 316 proposals).

BDO Global IFRS Resources

The following publications have been produced by the BDO Global IFRS group:

► IFRS at a Glance

A high level overview of International Financial Reporting Standards (IFRSs), including International Accounting Standards and Interpretations.

► IFRS in Practice

Practical information about the application of key aspects of IFRS, including industry specific guidance.

• Classification of Loans as current non-current*

► IFR Bulletins

Focus on the latest developments in international financial reporting.

• IASB publishes IFRS 18 Presentation and Disclosure in Financial Statements (IFRB 2024 04)
• Amendments to IAS 1 – Clarification of the meaning of ‘settlement’ in the classification of liabilities* (IFRB 2024 02)
• Classificati​on of liabilities as current or non-current: FAQs​ ​(IFRB 2021 06)
• Going concern - IFRS Foundation publishes guidance on disclosures​ (IFRB 2021 03)
• ​Effects of climate-related matters on financial statements (IFRB 2020 14).

* These IFR Bulletins deal with amendments to AASB 101 that may, for annual periods beginning on or after 1 January 2024, affect whether entities classify their liabilities as current or non-current. The amendments are contained in amending standard AASB 2020-1 Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-current and AASB 2022-6 Amendments to Australian Accounting Standards - Non-current Liabilities with Covenants (issued December 2022), which incorporates some but not all, of the proposals contained in ED 316 (refer to IFRB 2021-13 for details of the ED 316 proposals).

Webinars

BDO Australia conducts monthly complimentary webinars as an easy way to stay up to date with changes to accounting standards and other financial reporting developments. Recent webinars on this topic include:

• Classification of liabilities as current vs non-current (February 2024)

IFRIC agenda decisions

IFRS Interpretations Committee (the Committee) agenda decisions are those issues that the Committee decided not to take onto its agenda. Although not authoritative guidance, in practice they are regarded as being highly persuasive, and all entities reporting under IFRS should be aware of these decisions because they could impact the way particular transactions and balances are accounted for. Agenda decisions on this topic include:

• Presentation of financial statements when an entity is no longer a going concern​ (June 2021) and eLearning​
• Supply chain financing (reverse factoring) arrangements (December 2020) and eLearning and FAQ
• Presentation of assets and liabilities related to uncertain tax treatments (Sep 2019) and eLearning and FAQ
• Presentation of interest revenue for particular financial instruments (March 2018) and FAQ
• Presentation of income and expenses arising on financial instruments with a negative yield (January 2015) and FAQ
• Disclosure requirements relating to going concern assessment (July 2014) and FAQ
• Presentation requirements (May 2014) and FAQ
• Actuarial assumptins - discount rate - IAS 19​ (November 2013) and FAQ
• Presentation of payments on non-income taxes (July 2012) and FAQ
• Current or non-current classification of a callable term loan (November 2010) and FAQ​
• Going concern disclosure (July 2010) and FAQ
• Current or non-current asset classification – normal operating cycle (June 2005) and FAQ
• Comparative information for prospectuses (June 2005).

Frequently Asked Questions

FREQUENTLY ASKED QUESTIONS (FAQs) provide insights on a variety of IFRS topics. These FAQs incorporate BDO Global’s expertise as well as IFRS Interpretations Committee agenda decisions. Access to all FAQs on this topic can be accessed here. FAQs relating to IFRS Interpretations Committee agenda decisions can be accessed via IFRIC AGENDA DECISIONS. Other FAQs are listed individually below.

• Scope of IAS 1.69
• Unit of account for applying IAS 1.69
• Effect of covenants – compliance with covenants
• Effect of covenants – waiver received subsequent to period end
• Effect of covenants – waiver received prior to period end
• Effect of covenants – covenants tested after period end
• Effect of covenants – quarterly testing
• Effect of covenants – quarterly testing with violation after period end
• Conditional rollover rights
• Rollover agreed to prior to period end with a different lender
• Classification of contract liabilities
• Classification of trade payables
• Classification of convertible note – compound financial instrument with a European conversion option
• Classification of convertible note – compound financial instrument with an American conversion option
• Classification of convertible note – hybrid financial liability.

Online training resources

Improve your knowledge of accounting standards by purchasing our online training resources on a variety of financial reporting topics. Resources available on this topic include:

• A seminar – a pre-recorded two-hour webinar that provides a high-level overview of the accounting standard, as well as a question and answer case study booklet.