IASB has Deferred Amendments made to IAS 1
The International Accounting Standards Board (IASB) has decided to defer the effective date by one year of amendments to International Accounting Standard (IAS) 1 Presentation of Financial Statements regarding the Classification of Liabilities either as current or non-current.On January 23, 2020, the IASB issued some changes to be made to IAS 1 in connection with classifying liabilities as either current or non-current. Originally, the amendments were applicable to financial periods beginning on or after January 1, 2022 but in response to the outbreak of the novel coronavirus, the Board decided to defer the effective date of the amendments by one year in order to provide companies with more time to implement the changes resulting from the said amendments
The intention behind these changes is to provide the users of IAS 1 with a more general approach when classifying liabilities in accordance with the contractual arrangements in place at the reporting date.
The aim of these amendments is to help companies in determining whether, debt and other liabilities with no certain settlement/ payment date should be classified as current (due to be settled within 12 months) or non-current. The issued amendments also include clarification on the classification requirements for debt which a company may settle by converting it into share capital or other form of equity.
The amendments to IAS 1 regarding classification of liabilities are now applicable to financial periods beginning on or after January 1, 2023.