IASB Finalizes Amendments to IAS 1 That Clarify the Classification of Liabilities

The International Accounting Standards Board (IASB) has issued Classification of Liabilities as Current or Non-Current — amendments to IAS 1. The narrow-scope amendments “aim to promote consistency in applying the requirements by helping companies determine whether, in the statement of financial position, debt and other liabilities with an uncertain settlement date should be classified as current (due or potentially due to be settled within one year) or non-current.”

The amendments clarify — but do not change — existing requirements and are not expected to significantly affect companies’ financial statements.

The amendments are effective for annual reporting periods beginning on January 1, 2022, and should be applied retrospectively. Earlier application is permitted.