5 IFRS Interpretations Committee

25 September 2025 Agenda Paper 5

Executive Summary

Project Type: Influencing Project Scope: Limited

Purpose of the paper

The purpose of this paper is to present for Board approval a Project Initiation Plan (PIP) and a draft of a Final Comment Letter (FCL) in relation to the IFRS Interpretations Committee's (Committee) Tentative Agenda Decision (TAD): Updates to Committee's agenda decisions for IFRS 18.

Summary of the Issue

In July 2025 the Committee issued an invitation to comment on the TAD: Updates to Committee's agenda decisions for IFRS 18. The comment deadline is 6 October 2025. The TAD proposes updates to ten agenda decisions following the issuance of IFRS 18 Presentation and Disclosure in Financial Statements.

At its June 2025 meeting, the Board requested that a draft FCL be developed for discussion at the September 2025 Board meeting, to ensure it can be delivered in time for the Committee's deadline.

This paper presents for Board approval: a Project Initiation Plan (Appendix A), a draft Final Comment Letter (Appendix B) and a [draft] Due Process Compliance Statement (Appendix C).

Decisions for the Board

The Board is asked to consider and approve:

• The Project Initiation Plan (Appendix A).
• The Final Comment Letter (Appendix B).
• A [draft] Due Process Compliance Statement (Appendix C).

Recommendation

The Secretariat recommends that, subject to any amendments arising at this meeting, the Board considers and approves:

• The Project Initiation Plan (Appendix A).
• The Final Comment Letter (Appendix B).
• A [draft] Due Process Compliance Statement (Appendix C).

Background

1In 2024 the IFRS Interpretations Committee (the Committee) initiated discussions to decide the approach to update 41 Committee's agenda decisions referencing IAS 1 Presentation of Financial Statements. The Committee's main aim is to remove inconsistencies arising from the issuance of IFRS 18 Presentation and Disclosure in Financial Statements and the withdrawal of IAS 1.

Approach for 31 agenda decisions

2The approach to update 31 of those agenda decisions was discussed by:

1. the Committee at its September 2024 ² November 2024 ³ meetings (reported to the Board at its meetings on 19 September 2024 ⁴, 28 November 2024 ⁵); and
2. the IASB at its April 2025 meeting ⁶ (reported to the Board at its meeting on 22 May 2025 ⁷).

As part of these discussions, it was decided that two agenda decisions would be withdrawn and the rest would be updated but not subject to public consultation. ⁸

Approach for the other ten agenda decisions

3The Committee discussed the approach to update the remaining ten agenda decisions at its meeting in June 2025 ⁹ (reported to the Board at its June 2025 meeting ¹⁰). A further update was provided to the Board at its 15 July 2025 ¹¹ meeting. These agenda decisions focus on fact patterns that relate to other IFRS Accounting Standards and include references to IAS 1 that have not been brought forward unchanged ¹². They comprise:

1. Nine agenda decisions that refer to the general requirements about presentation, materiality and aggregation of information in the financial statements. The Committee proposed replacing the references to IAS 1 with references to the new or amended requirements in IFRS 18.
2. The agenda decision Supply Chain Financing Arrangements–Reverse Factoring (December 2020). The Committee proposed explaining how an entity applies the requirements in IFRS 18 to the fact pattern addressed by this agenda decision.

4On 8 July 2025 the Committee issued the invitation to comment for the Tentative Agenda Decision (TAD): Updates to Committee’s agenda decisions for IFRS 18. The TAD includes the proposed individual updates to the ten agenda decisions discussed by the Committee. The Committee asked for feedback about each individual agenda decision. The comment deadline is 6 October 2025.

Project Initiation Plan

5A Project Initiation Plan (PIP) is presented at Appendix A for Board consideration and approval.

6The PIP has been prepared in line with the UKEB's Due Process, setting out the key milestones and stakeholder outreach envisaged for IFRS Interpretation Committee's tentative agenda decisions.

Question for the Board

Final Comment Letter

7In line with the Board discussions at the June and July 2025 meetings, the draft FCL, included at Appendix B to this paper, supports the finalisation and publication of the TAD. The FCL, however, highlights some areas where clarity could be enhanced to reduce the risk of unintended consequences, together with some recommendations to address them.

8Throughout June–September 2025, the Secretariat engaged with members of the UKEB's Accounting Firms and Institutes Advisory Group (AFIAG), Investor Advisory Group (IAG) and the Preparer Advisory Group (PAG) and received general support before the text of the TAD came out. After the TAD was published we received further detailed input from a member of AFIAG with some recommendations to enhance clarity on the proposed updates (this has been made available to the Board). All input was considered and reflected accordingly in the draft FCL (presented in Appendix B).

Question for the Board

Due Process Compliance Statement

9A Due Process Compliance Statement summarising the due process activities undertaken is presented for Board approval at this meeting.

Question for the Board

Next steps

10If the Board decides to approve the Draft Final Comment Letter, the Final Comment Letter will be submitted to the Committee by 6 October 2025. The comment letter will also be made publicly available on the UKEB website.

11A final version of the Due Process Compliance Statement reflecting completion of the final stages of the project will be brought to the Board for noting at a subsequent meeting.

Annex 1: Agenda decisions referencing IAS I Presentation of Financial Statements

A1The following table summarises the approach taken for 31 agenda decisions:

The following table provides a brief description of the ten agenda decisions that are proposed to be updated as part of the Tentative Agenda Decision (TAD): Updates to Committee’s agenda decisions for IFRS 18.

Appendix A: IFRS Interpretations Committee Tentative Agenda Decision: Updates to Committee's agenda decisions for IFRS 18 – Project Initiation Plan

Project overview

A1This project initiation plan relates to the IFRS Interpretations Committee's (the Committee) Tentative Agenda Decision (TAD): Updates to Committee’s agenda decisions for IFRS 18, following the issuance of IFRS 18 Presentation and Disclosure in Financial Statements. The TAD was published on 8 July 2025 with a response deadline of 6 October 2025.

A2The ten agenda decisions included in the TAD focus on fact patterns that relate to other IFRS Accounting Standards and include references to IAS 1 that have not been brought forward unchanged and are comprised of:

1. Nine agenda decisions that refer to the general requirements about presentation, materiality and aggregation of information in the financial statements. The Committee proposed replacing the references to IAS 1 with references to the new or amended requirements in IFRS 18. These agenda decisions are:
   1. Disclosure of Revenues and Expenses for Reportable Segments (IFRS 8 Operating Segments) (July 2024)
   2. Demand Deposits with Restrictions on Use arising from a Contract with a Third Party (IAS 7 Statement of Cash Flows) (April 2022)
   3. Subsequent Expenditure on Biological Assets (IAS 41 Agriculture) (September 2019)
   4. Disclosure of Changes in Liabilities Arising from Financing Activities (IAS 7 Statement of Cash Flows) (September 2019)
   5. Physical Settlement of Contracts to Buy or Sell a Non-financial Item (IFRS 9 Financial Instruments) (March 2019)
   6. Income and expenses arising on financial instruments with a negative yield–presentation in the statement of comprehensive income (IAS 39 Financial Instruments: Recognition and Measurement and IAS 1 Presentation of Financial Statements) (January 2015)
   7. Presentation of payments on non-income taxes (IAS 1 Presentation of Financial Statements and IAS 12 Income Taxes) (July 2012)
   8. Classification of tonnage taxes (IAS 12 Income Taxes) (May 2009)
   9. Normal operating cycle (IAS 1 Presentation of Financial Statements) (June 2005).
2. The agenda decision Supply Chain Financing Arrangements–Reverse Factoring (December 2020). The Committee proposed explaining how an entity applies the requirements in IFRS 18 to the fact pattern addressed by this agenda decision.

A3At its June 2025 meeting the Board decided to respond to the TAD. This is consistent with paragraphs 5.27–5.33 of the UKEB Due Process Handbook (the Handbook).

Milestones

A4Paragraph 3.7 of the Handbook notes that: “The activities undertaken to achieve the milestones for each project should be proportionate to the significance, urgency, complexity (i.e. nature or scope), size, expected timeline and expected interest or controversy attached to the project”.

Draft Comment Letter

A5The Handbook ¹⁶ states that for an influencing project a Draft Comment Letter is generally mandatory, unless impracticable.

A6Paragraph 3.9 in the Handbook acknowledges that the UKEB may decide not to undertake a ‘mandatory’ milestone for a particular project. The Board should discuss the reasons for this decision at a public Board meeting. The Project Initiation Plan of the applicable project should clearly outline these reasons.

A7Following a review of the proposed timeline at its June 2025 meeting, the Board concluded that issuing a Draft Comment Letter in response to the TAD was not practicable (as per paragraph 5.17 of the Handbook).

Outreach

A8Paragraph 5.32 of the Handbook notes that in responding to a tentative agenda decision, some outreach activities are still undertaken, e.g. consultation with a representative group of stakeholders and/or with members of the UKEB's standing and/or ad-hoc advisory groups.

A9The Secretariat engaged with members of the UKEB's Accounting Firms and Institutes Advisory Group (AFIAG), Investor Advisory Group (IAG) and the Preparer Advisory Group (PAG), (in person at its meetings during June 2025 ¹⁷ and subsequently via email ¹⁸). All input was considered and reflected accordingly in the draft Final Comment Letter.

Proportionate approach

A10Issuing a final comment letter without first consulting on a draft comment letter represents a proportionate approach given the nature of the proposed updates and the timeline for the TAD. More specifically:

1. The proposed updates to the agenda decisions included in the TAD do not introduce substantial or contentious issues nor change other aspects of these agenda decisions.
2. The very short timeline for the TAD (published after UKEB July 25 Board paper publication deadline, with final comments due before the October 2025 UKEB meeting) does not allow the Board to discuss a draft comment letter and receive feedback on this letter in time for the final submission deadline.

A11An ad-hoc advisory group is not considered necessary for this project.

Final Comment Letter

A12A draft Final Comment Letter is presented for Board approval at its 25 September 2025 meeting.

Project Closure

A13A Feedback Statement does not need to be prepared for this project as no draft comment letter (UKEB consultation document) was published.

A14In line with paragraphs 5.23–5.24 of the Handbook, the corresponding [draft] Due Process Compliance Statement (DPCS) summarising the due process activities undertaken is presented for Board approval at this meeting along with the draft Final Comment Letter. A final version of the DPCS reflecting completion of the final stages of the project will be brought to the Board for noting at a subsequent meeting.

Resources for the project

A15The Secretariat involved in this project consists of one Project Director, on a part-time basis, with oversight provided by one Senior Project Director. Sufficient resources are allowed for in the UKEB plan for 2025–26.

Appendix B: IFRS Interpretations Committee Tentative Agenda Decision: Updates to Committee's agenda decisions for IFRS 18

Bruce Mackenzie Chair IFRS Interpretations Committee Columbus Building 7 Westferry Circus Canary Wharf London E14 4HD

X September 2025

Dear Mr Mackenzie

Invitation to comment: Tentative Agenda Decision: Updates to Committee's agenda decisions for IFRS 18

1The UK Endorsement Board (UKEB) is responsible for endorsement and adoption of IFRS Accounting Standards for use in the UK and therefore is the UK's National Standard Setter for IFRS Accounting Standards. The UKEB also leads the UK's engagement with the IFRS Foundation on the development of new standards, amendments and interpretations. This letter is intended to contribute to the Foundation's due process. The views expressed by the UKEB in this letter are separate from, and will not necessarily affect the conclusions in, any endorsement and adoption assessment on new or amended international accounting standards undertaken by the UKEB.

2There are currently approximately 1,400 entities with equity listed on the London Stock Exchange that prepare their financial statements in accordance with IFRS. ¹⁹ In addition, UK law allows unlisted companies the option to use IFRS and approximately 14,000 such companies currently take up this option. ²⁰

3We welcome the opportunity to provide comments on the IFRS Interpretations Committee's (the Committee) Tentative Agenda Decision (TAD): Updates to Committee’s agenda decisions for IFRS 18. The TAD proposes updates to ten agenda decisions following the issuance of IFRS 18 Presentation and Disclosure in Financial Statements.

4In developing this letter, we have consulted with stakeholders in the UK, including preparers of accounts, accounting firms and institutes, and users of accounts.

Technical analysis of the TAD

5Overall, the UKEB agrees with the Committee's proposed updates to the:

1. Nine agenda decisions, to replace the references to IAS 1 Presentation of Financial Statements with references to the new or amended requirements in IFRS 18 about presentation, materiality and aggregation, and with the decision not to revisit other aspects of these agenda decisions.
2. Agenda Decision Supply Chain Financing Arrangements–Reverse Factoring (December 2020) to explain how an entity applies the requirements of IFRS 18 to the fact pattern addressed in this agenda decision.

6However, as we explain in the Appendix to this letter, we think that the Committee should also consider the recent amendments to IAS 7 and IFRS 7 ²¹ on Supplier Finance Arrangements (issued in May 2023) on the updated agenda decision Supply Chain Financing Arrangements–Reverse Factoring (December 2020). We would suggest either expanding the agenda decision to further refer to these requirements, or at the very least, including a footnote reference to acknowledge their existence.

7We have also made some recommendations on the drafting of the proposed updates to enhance clarity and help reduce the risk of unintended consequences. Our detailed recommendations are set out in the Appendix to this letter.

8Notwithstanding our comments, we encourage the Committee to finalise the agenda decisions included in the TAD.

9If you have any questions about this response, please contact the project team at [email protected].

Yours sincerely

Paul Lee Chair UK Endorsement Board

Appendix A: Tentative Agenda Decision: Updates to Committee's agenda decisions for IFRS 18– detailed recommendations

Nine agenda decisions

1) Disclosure of Revenues and Expenses for Reportable Segments (IFRS 8 Operating Segments) (July 2024)

A1We support:

1. Replacing the references to the materiality and aggregation requirements in IAS 1 with references to the new principles of aggregation and disaggregation in IFRS 18 (i.e. paragraphs 41–43).
2. Updating the definition of ‘material information’ (from Appendix A of IFRS 18) and adding guidance on the application of ‘materiality’ (from Appendix B of IFRS 18).

A2Under the section of Aggregation and Disaggregation of information, in the first sentence “provide” should be added and not “provides” (edit shown in grey):

“Paragraphs 41–43 of IFRS 18 Paragraphs 30–31 of IAS 1 provides provide requirements about....”.

2) Demand Deposits with Restrictions on Use arising from a Contract with a Third Party (IAS 7 Statement of Cash Flows) (April 2022)

A3We support updating the references to IAS 1 with references to:

1. Paragraphs 99(d) and 103(k) of IFRS 18 concerning the presentation of ‘cash and cash equivalents’ in the statement of financial position.
2. Paragraph 23–24 of IFRS 18 concerning the presentation of additional line items and subtotals aimed at providing a useful structured summary.
3. Paragraph 20 of IFRS 18 concerning the requirement to provide additional disclosures to enable users understand the effect of transactions and other events and conditions on the entity’s financial position and financial performance.

3) Subsequent Expenditure on Biological Assets (IAS 41 Agriculture) (September 2019)

A4The Committee proposes to delete the reference to the requirements that an entity could follow to assess “how to present such subsequent expenditure in the statement of profit or loss” by deleting the reference to paragraphs 81–105 of IAS 1. We consider that rather than deleting this reference, it should be replaced by the new references in IFRS 18 (our proposed edits are shown in grey):

Accordingly, the Committee concluded that, applying IAS 41, an entity either capitalises subsequent expenditure or recognises it as an expense when incurred. The Committee observed that capitalising subsequent expenditure or recognising it as an expense has no effect on the fair value measurement of biological assets nor does it have any effect on profit or loss; however, it affects the presentation of amounts in the statement of profit or loss. In assessing how to present such subsequent expenditure in the statement of profit or loss, an entity would apply the requirements in paragraphs 46–85 of IFRS 18 Presentation and Disclosure in Financial Statements paragraphs 81-105 of IAS 1 Presentation of Financial Statements. In particular, the Committee observed that the entity would:

A5In numerals ‘a.’ and ‘b.’ we agree to add references to the new requirements in IFRS 18 concerning the presentation of:

1. Additional line items and subtotals aimed at providing a useful structured summary (paragraphs 23–24 of IFRS 18).
2. if the expenses are classified in the operating category of the statement of profit or loss, the entity would is required–in applying paragraph 78 of IFRS 18–to classify and present expenses in line items in a way that provides the most useful structured summary of its expenses, using a classification based on either one or both of the nature of expenses or their function of the expenses within the entity (or use both classifications). applying paragraph 99, present in the statement(s) presenting profit or loss and other comprehensive income or in the notes an analysis of expenses recognised in profit or loss using a classification based on either their nature or their function within the entity, whichever provides information that is reliable and more relevant.

A6We also agree that the title of IAS 8 be updated as well as the references to the paragraphs on accounting policy disclosures that were transferred from IAS 1 into IAS 8.

4) Disclosure of Changes in Liabilities Arising from Financing Activities (IAS 7 Statement of Cash Flows) (September 2019)

A7We support replacing the references to the materiality and aggregation requirements in IAS 1 with references to the new principles of aggregation and disaggregation in IFRS 18 (paragraphs 41–43).

A8In numeral ‘b.' we agree to the replacement of the reference to paragraph 112(c) of IAS 1 with a reference to paragraph 113(c) of IFRS 18 (i.e. the requirement to disclose other information in the notes that is necessary to understand information in the primary financial statements). However, the transfer of paragraph 112(c) of IAS 1 to IFRS 18 included editorial changes. We consider that these changes should be included in the wording as shown below (our proposed edits are shown in grey):

b. in explaining liabilities arising from financing activities, and cash and non-cash changes in those liabilities, an entity applies paragraph 44B of IAS 7 and paragraph 113(c) of IFRS 18 paragraph 112(c) of IAS 1. Paragraph 113(c) of IFRS 18 Paragraph 112(c) of IAS 1 requires an entity to disclose ‘other information that is not presented elsewhere in the primary financial statements, but is necessary for relevant to an understanding of any of them'. [...]

5) Physical Settlement of Contracts to Buy or Sell a Non-financial Item (IFRS 9 Financial Instruments) (March 2019)

A9We agree with the proposed update to remove the statement that ‘IAS 1 does not specify requirements for the presentation of amounts related to the remeasurement of derivatives’ as paragraphs B70–B76 of IFRS 18 set out specific requirements for classification of gains and losses on derivatives and designated hedging instruments in categories in the statement of profit or loss.

A10We observe that the agenda decision states (emphasis added): “In determining what line items to present in profit or loss, the requirements in IFRS 18 (including those related to aggregation) are applicable”. However, to provide full clarity we would advise that the agenda decision specify these requirements. For instance, in our view the following general requirements in IFRS 18 would be applicable:

1. The roles of the primary financial statements and the notes (paragraphs 15–22).
2. The presentation of additional line items and subtotals to provide a useful structured summary (paragraphs 23–24).
3. The principles of aggregation and disaggregation (paragraphs 41–43).
4. The disclosure of other information in the notes that is necessary to understand information in the primary financial statements (paragraph 113(c)).

6) Income and expenses arising on financial instruments with a negative yield–presentation in the statement of comprehensive income (IAS 39 Financial Instruments: Recognition and Measurement and IAS 1 Presentation of Financial Statements) (January 2015)

A11We support:

1. Adding a reference to the new requirements in IFRS 18 concerning the presentation of additional line items and subtotals aimed at providing a useful structured summary (paragraph 24 of IFRS 18).
2. Updating the reference to the requirement to disclose other information in the notes that is necessary to understand information in the primary financial statements (paragraph 113(c) of IFRS 18).

7) Presentation of payments on non-income taxes (IAS 1 Presentation of Financial Statements and IAS 12 Income Taxes) (July 2012)

A12We support the proposed update to replace the existing reference to IAS 1 with a reference to paragraph 75(a)(iv) of IFRS 18 pertaining the presentation of ‘income tax expense or income’ in the statement of profit or loss.

8) Classification of tonnage taxes (IAS 12 Income Taxes) (May 2009)

A13We support adding a reference to the new requirements in IFRS 18 concerning the presentation of additional line items and subtotals aimed at providing a useful structured summary (paragraph 24 of IFRS 18).

9) Normal operating cycle (IAS 1 Presentation of Financial Statements) (June 2005)

A14We observe that this agenda decision was based on a question about the requirements in paragraphs 57(a) and (c) of IAS 1. Therefore, we agree to retain this reference and to add the new reference to IFRS 18 in brackets (i.e. paragraphs 99(a) and (c)). This appropriately reflects the framework in place at the time the question was formulated to the Committee.

A15We disagree, however, with the proposal to replace the reference to paragraph 71 of IAS 1 with only a reference to the roles of the primary financial statements and the notes (in paragraphs 15–22 of IFRS 18) because the ‘old’ version of paragraph 71 of IAS 1 ²² (on which the 2005 agenda decision is based on) included requirements on:

1. aggregation such as the inclusion of “line items [...] when the size, nature or function of an item or aggregation of similar items is such that separate presentation is relevant to an understanding of the entity’s financial position. The principles of aggregation and disaggregation outlined in paragraphs 41–42 of IFRS 18 encompass some of these requirements, more specifically, the separate presentation of material information; and the aggregation and disaggregation of line items based on shared or distinct characteristics; and
2. the use of descriptions and the ordering and aggregation of items in the statement of financial position. These requirements were partially carried forward to paragraph 106 of IFRS 18 ²³.

A16Based on the above, we consider that the agenda decision should include references to paragraphs 41–42 and 106 of IFRS 18, in addition to the proposed reference to the roles of the primary financial statements and the notes. Our recommended edits are included below in grey:

...Furthermore, if inventories of different cycles were held, IFRS 18 requires an entity to consider the roles of the primary financial statements and the notes (paragraphs 15-22 of IFRS 18), the principles of aggregation and disaggregation in paragraphs 41 and 42 of IFRS 18 (i.e. the presentation of material information and the grouping and separation of line items based on shared or distinct characteristics) as well as the requirements in paragraph 106 of IFRS 18 to determine whether and what additional information to present or disclose. and it was material to readers' understanding of an entity's financial position, then the general requirement in IAS 1.71 already required disclosure of further information.

10) Supply Chain Financing Arrangements–Reverse Factoring (December 2020)

A17Overall, we agree with the added explanations of how an entity applies the requirements of IFRS 18 to the fact pattern addressed in this agenda decision. However, see below some recommendations on the drafting of the proposed updates that would help enhance clarity for stakeholders.

Presentation in the statement of financial position

A18We agree that the agenda decision explains the factors an entity considers in determining the information it presents in the statement of financial position about the liabilities that are part of a reverse factoring arrangement.

A19However, we recommend that the Committee:

1. Add specific references to IFRS 18’s requirements into the explanatory material to improve the flow and readability.
2. Replace the reference to paragraph 22 of IFRS 18 with a reference to paragraphs 96 and 103–104 of IFRS 18. These paragraphs provide the specific requirements for structuring the statement of financial position. Additionally, italicising the individual line items (cited in paragraph 103) would help improve their visibility and identification.

Our recommended edits are included below in grey:

Presentation in the statement of financial position

IFRS 18 Presentation and Disclosure in Financial Statements specifies how an entity is required to present line items of liabilities in the statement of financial position. To determine which line items to present, an entity considers:

a. the roles of the primary financial statements and the notes; and

b. the principles of aggregation and disaggregation.

In accordance with paragraph 16 of IFRS 18, the role of the primary financial statements is to provide structured summaries of a reporting entity's recognised assets, liabilities, equity, income, expenses and cash flows, that are useful to investors (referred to as ‘a useful structured summary’). In accordance with paragraph 17 of IFRS 18, the role of the notes is to provide material information.

Paragraphs 2296 and 103–104 of IFRS 18 establishes the structure of the statement of financial position. Paragraph 96 states an entity is required to present current and non-current assets, and current and non-current liabilities, as separate classifications in its statement of financial position (except when a presentation based on liquidity provides a more useful structured summary). Additionally, paragraphs 103(m) and 103(o) of IFRS 18 requires an entity to present in its statement of financial position line items for trade and other payables and financial liabilities (other than trade and other payables and provisions). However, in accordance with paragraph 23 of IFRS 18 an entity need not present separately a line item in a primary financial statement if doing so is not necessary for the statement to provide a useful structured summary.

To determine whether it needs to present additional line items in its statement of financial position an entity applies its judgement based on an assessment of the nature or function of the assets or liabilities, in accordance with paragraph B109 of IFRS 18. The characteristics listed in paragraphs B110(c)−(k) of IFRS 18 assist an entity in identifying the nature or function of assets and liabilities.

A20We agree with the proposed description of the characteristics an entity considers in identifying the nature or function of the liabilities (i.e. duration and timing of settlement, liquidity, type, tax effects and restrictions on the transferability of a liability).

A21In the section of Committee's observations we recommend the following:

1. In numeral ‘b.’ we recommend italicising the individual line items mentioned to improve their visibility and identification. We also recommend adding some edits to improve the flow. Our recommended edits are included below in grey:
   1. an entity presents other payables together with trade payables only if those other payables they share at least one similar characteristic with trade payables other than meeting the definition of liabilities–for example, if the other payables are part of the working capital used in the entity’s normal operating cycle.
2. We recommend some edits to numerals ‘c.’ and ‘d.’ to improve the flow. Our recommended edits are included below in grey:
   1. an entity presents the liabilities that are part of a reverse factoring arrangement that have sufficiently dissimilar characteristics from other liabilities separately in the statement of financial position if such presentation these liabilities have sufficiently dissimilar characteristics from other liabilities that such this presentation in the statement of financial position-is necessary for the statement of financial position to provide a useful structured summary.
   2. paragraph B111(d) of IFRS 18 states that trade payables disaggregated in accordance with IAS 7 Statement of Cash Flows might have sufficiently dissimilar characteristics that presentation in the statement of financial position is necessary to provide a useful structured summary or disclosure in the notes is necessary to provide material information.

Derecognition of a financial liability

A22We agree with the proposed updates to change the reference from IAS 1 to IFRS 18 in this section.

Presentation in the statement of cash flows

A23We consider that this section should include a brief introduction to remind the reader that the general requirements for financial statements in IFRS 18 also apply to the statement of cash flows. In line with this we believe that the paragraph proposed in page 25 of IFRIC agenda paper 5B (June 2025), reproduced below, is appropriate for this purpose:

Presentation in the statement of cash flows

The Committee observed that IAS 7 Statement of Cash Flows sets out requirements for the presentation and disclosure of cash flow information. However, the general requirements for financial statements in paragraphs 9–43 and 113–114 of IFRS 18 apply to the statement of cash flows. Paragraph 10 of IAS 7 sets out the structure of the statement of cash flows–the statement of cash flows shall report cash flows during the period classified by operating, investing and financing activities.

Disclosures in the notes to the financial statements

A24We support the proposed update to replace the existing reference to paragraph 122 of IAS 1 with a reference to paragraph 27G of IAS 8 pertaining to the judgements made by management.

A25In numeral b we support updating the reference to paragraph 113 of IFRS 18. However, the current description in this numeral does not accurately reflect the specific requirements outlined in this paragraph. To ensure consistency and clarity, we recommend the following edits (marked in grey):

b. reverse factoring arrangements may have a material effect on an entity's financial statements. An entity provides other information about reverse factoring arrangements that is not presented in its primary financial statements to the extent that such information is relevant necessary for to an understanding of any of those financial statements those arrangements (paragraph 113 of IFRS 18paragraph 112 of IAS 1). The Committee noted that making materiality judgements involves both quantitative and qualitative considerations.

A26As a related comment we observe that this agenda decision has not been updated for the recent amendments to IAS 7 and IFRS 7 Financial Instruments: Disclosures on Supplier Finance Arrangements (issued in May 2023) which added paragraphs 44F–44H to IAS 7 and amended paragraph B11F of IFRS 7 and were effective for periods beginning on or after 1 January 2024. These amendments require disclosures about an entity’s involvement in supplier finance arrangements. It is our view that not considering these disclosure requirements in the updated agenda decision would appear inconsistent, particularly given that it contains a dedicated section on required disclosures. We would suggest, either expanding the agenda decision to further refer to these requirements, or at the very least, including a footnote reference to acknowledge their existence.

Other comments

A27We suggest that the IFRS Interpretations Committee considers maintaining a publicly accessible archive of original and revised agenda decisions it has issued. This would serve as a useful resource for entities seeking to understand the historical context and rationale behind specific agenda decisions and would support comparative analysis.

Appendix C: IFRS Interpretations Committee Tentative Agenda Decision: Updates to Committee's agenda decisions for IFRS 18 - [Draft] Due Process Compliance Statement

The IFRS Interpretations Committee (the Committee) published the Tentative Agenda Decision Updates to Committee's agenda decisions for IFRS 18 on 8 July 2025. The TAD proposes updates to ten agenda decisions following the issuance of IFRS 18 Presentation and Disclosure in Financial Statements.

The Committee's comment period [ended] on 6 October 2025.

Influencing process

Project preparation

Desk-based research

Outreach

Draft Comment Letter (DCL)

Project finalisation and project closure

Ongoing communications

Conclusion

This project complies with the applicable due process steps envisaged for influencing IFRS Interpretation Committee’s tentative agenda decisions, as set out in the December 2022 UKEB Due Process Handbook.

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