IASB amends accounting standard for financial statement information
October 31, 2022
The amendments, designed to improve company information about long-term debt with covenants, are effective for annual reporting periods beginning in 2024 or later.
The IASB issued amendments to IAS 1, Presentation of Financial Statements, that aim to improve the information companies provide about long-term debt with covenants.
The amendments to IAS 1 specify that covenants to be complied with after the reporting date do not affect the classification of debt as current or noncurrent at the reporting date. Instead, the amendments require a company to disclose information about these covenants in the notes to the financial statements, according to an IFRS news release.
The IASB expects the amendments to improve the information a company provides about long-term debt with covenants, the news release said, by enabling investors to understand the risk that such debt could become repayable early.
The amendments are effective for annual reporting periods beginning on or after 1 January 2024, with early adoption permitted.
The document can be downloaded from the IFRS website. A subscription is required to access the content.