Classification of Liabilities (Amend IAS 1)
|Current Status||Next Steps|
IASB is deliberating comments received on its Exposure Draft.
IASB to finalize amendments in 2019.
The Accounting Standards Board (AcSB) is participating in the International Accounting Standards Board’s (IASB) project to amend International Accounting Standard (IAS) 1 Presentation of Financial Statements.
The objective of this project is to clarify the criteria for the classification of a liability as either current or non-current 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.
The AcSB’s due process includes ensuring that Canadian entities’ financial reporting needs are considered by the IASB and issuing the AcSB’s own exposure draft on each IASB proposal. Subject to the responses to the AcSB’s exposure draft on whether the IASB’s proposals are appropriate for application in Canada, the AcSB expects that the amendments will be incorporated into Canadian GAAP in accordance with the AcSB’s strategy of adopting IFRSs for publicly accountable enterprises.
PROJECT NEWS & DECISION SUMMARIES
AcSB Response – Classification of Liabilities (Proposed amendments to IAS 1)
On June 10, 2015, the AcSB submitted a comment letter responding to the IASB’s Exposure Draft issued in February 2015. The letter notes that there is a need to clarify the criteria for classification of a liability as either current or non-current but does not agree with the proposals as written. The letter does not support the proposed amendments because the revised wording does not provide greater clarity, represents a step backward and would result in greater diversity in practice. The letter expresses concern that attempting to address only a few issues on a narrow scope basis on a standard that has no clear principle articulated with regard to classification of liabilities raises a host of issues. The letter suggests that a more comprehensive project that identifies a principle and addresses the inconsistency with other requirements of the standard is necessary. Read the AcSB letter posted by the IASB.
AcSB Decision Summary – May 25-26, 2015
The AcSB approved its response letter to the IASB’s Exposure Draft, “Classification of Liabilities (Proposed amendments to IAS 1),” subject to drafting changes.
AcSB Exposure Draft – Classification of Liabilities (Proposed amendments to IAS 1)
March 11, 2015. The AcSB has issued an Exposure Draft that corresponds to the IASB’s Exposure Draft on this topic. Canadian stakeholders are encouraged to submit their comments, on the form provided, by June 10, 2015.
IASB Exposure Draft – Classification of Liabilities (Proposed amendments to IAS 1)
February 12, 2015. The IASB has issued an Exposure Draft proposing amendments to IAS 1 Presentation of Financial Statements. Canadian stakeholders are encouraged to submit their comments to the IASB by June 10, 2015.
Disclaimer: This project summary has been prepared for information purposes only. Decisions reported are tentative and reflect only the current status of discussions on this project, which may change after further Board deliberations. Decisions to publish Handbook material are final only after a formal ballot process.