The International Accounting Standards Board (IASB) published for public comment the Exposure Draft Classification of Liabilities (Proposed amendments to IAS 1), which clarifies how entities classify debt, particularly when it is coming up for renewal.
The proposed amendments are designed to improve presentation in financial statements by clarifying the criteria for the classification of a liability as either current or non-current. The proposed amendments do this by:
- clarifying that the classification of a liability as either current or non-current is based on the entity’s rights at the end of the reporting period; and
- making clear the link between the settlement of the liability and the outflow of resources from the entity.
These are proposed clarifications to the Classification of Liabilities element of IAS 1 Presentation of Financial Statements. The proposals come out of an initiative identified and considered by the IFRS Interpretations Committee.
The Exposure Draft was open for comment until 10 June 2015.