IASB Updates: IAS 1
This IASB Update highlights preliminary decisions of the International Accounting Standards Board (Board). Projects affected by these decisions can be found on the work plan. The Board’s final decisions on IFRS® Standards, Amendments and IFRIC® Interpretations are formally balloted as set out in the IFRS Foundation’s Due Process Handbook.
The Board met remotely on 20–21 July 2021.
In addition, the IASB held a remote joint meeting with the Financial Accounting Standards Board (FASB) on 23 July 2021. Read the joint Update below.
Maintenance and consistent application
Maintenance and consistent application (Agenda Paper 12)
The Board met on 20 July 2021 to consider the classification of debt as current or non-current, supplier finance arrangements and matters discussed at the June 2021 IFRS Interpretations Committee (Committee) meeting.
Classification of Debt with Covenants as Current or Non-current (IAS 1): Transition, Early Application and Due Process (Agenda Paper 12A)
The Board discussed requirements for the transition to, and early application of, the proposed amendments to IAS 1 Presentation of Financial Statements. The Board also discussed due process, including permission to begin the balloting process.
The proposed amendments to IAS 1 would:
- modify the requirements introduced by Classification of Liabilities as Current or Non-current (2020 amendments) on how an entity classifies debt and other financial liabilities as current or non-current in particular circumstances; and
- defer the effective date of the 2020 amendments to no earlier than 1 January 2024.
Transition
The Board tentatively decided to:
- require entities to apply the proposed amendments retrospectively in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors; and
- provide no exemption for first-time adopters.
All 12 Board members agreed with these decisions.
Early application
The Board tentatively decided to permit an entity to apply the proposed amendments earlier than the effective date.
All 12 Board members agreed with this decision.
Due process
The Board tentatively decided to allow a comment period of no fewer than 120 days for the exposure draft of its proposed amendments to IAS 1. All 12 Board members agreed with this decision.
All 12 Board members confirmed they were satisfied the Board has complied with the applicable due process requirements and has undertaken sufficient consultation and analysis to begin the process for balloting the exposure draft.
Two Board members indicated an intention to dissent from the proposals in the exposure draft.
Next step
The Board plans to publish the exposure draft in the fourth quarter of 2021.
Source: ifrs.org
