IASB’s Exposure Draft Non-Current Liabilities with Covenants

Date: 25 November 2021

The IASB has published an Exposure Draft on Non-Current Liabilities with Covenants that amends IAS 1 Presentation of Financial Statements. It addresses previous amendments that would result in some non-current liabilities being classed as current, if future covenants were not met at reporting date. The new amendments remove this requirement, so that covenants applicable within twelve months after the reporting period do not affect classification of a liability as current or non-current.

However, entities would be required to include a new classification of liabilities on the face of the Statement of Financial Position, “non-current liabilities subject to conditions within twelve months”.

The UKEB is developing a comment letter setting out its view of the IASB’s proposed amendments. If you have views on the impact of the original or proposed amendment and you would like to input into the UKEB’s comment letter to the IASB please contact us: UKEndorsementBoard@endorsement-board.uk.

To find out more visit our project page Non-Current Liabilities with Covenants (Proposed Amendments to IAS 1) | UK Endorsement Board (endorsement-board.uk)