Feedback Statement - Supplier Finance Arrangements

| UKEB tentative assessment | Stakeholder views |-------------------|-------------------|-----------------------| | ----------------------------------------------------------- | ------------------- | ----------------------- | | Technical accounting criteria assessment | The draft ECA tentatively concluded that the Amendments met the criteria of relevance, reliability, understandability and comparability required of the financial information needed for making economic decisions and assessing the stewardship of management, as required by Regulation 7(1) of SI 2019/685. | All respondents were supportive of the UKEB's tentative conclusion. One respondent, who did agree with the UKEB's tentative conclusion: * considered the Amendments would be only partially effective in their aim of increasing transparency on the extent of usage of supplier finance arrangements throughout the year; * suggested that investors would require additional disclosures, such as an average balance over the year, or total interest costs and average interest rate over the year, or a maximum balance at any point in the financial year; and * acknowledged additional, complementary disclosure requirements in other IFRS Accounting Standards (such as IAS 1 paragraph 31) but urged the FRC to provide guidance to set expectations of how preparers should disclose the extent of their ongoing use of such arrangements. |-------------------|-----------------------| | UKEB tentative assessment | Stakeholder views |-------------------|-----------------------| | UKEB tentative assessment | Stakeholder views |-------------------|-----------------------| | UKEB tentative assessment | Stakeholder views |-------------------|-----------------------| | True and fair view assessment | The draft ECA tentatively concluded that the Amendments were not contrary to the true and fair view principle set out in Regulation 7(1) of SI 2019/685. | All respondents were supportive of the UKEB's tentative conclusion. One respondent, who did agree with the UKEB's tentative conclusion, considered that the Amendments should also had been made mandatory for interim reporting. | Consistent with the tentative assessment. The UKEB considered the specific feedback from one of the respondents in relation to interim reporting. The UKEB noted that the respondent was supportive of its tentative decision to adopt the Amendments. The UKEB therefore concluded that the issue raised by the respondent did not alter its adoption decision. | | UK long term public good** | The draft ECA tentatively concluded that having considered all relevant aspects, including the trade-off between the costs and benefits of implementing the Amendments, the use of the Amendments is likely to be conducive to the long term public good in the UK as required by Regulation 7(1) of SI 2019/685. | All respondents were supportive of the UKEB's tentative conclusion. One respondent, who did agree with the UKEB's tentative conclusion: * Noted that additional disclosures about the extent of usage of supplier finance arrangements during the year would have been desirable. [Refer to 'Technical accounting criteria assessment' on previous page]. * Believed the Amendments should be subject to an automatic review by the IASB 24 months after implementation. | Consistent with the tentative assessment. The UKEB's assessment in the ECA is that this is not a significant change in accounting practice. It will therefore monitor the impact of these Amendments as part of its monitoring activities in relation to the IASB's workplan. |