IASB Publishes Amendments to IAS 1 to Defer the Effective Date of the Amendments to IAS 1 – Classification of Liabilities as Current or Non-Current

On 15 May 2020, the IASB has published Amendments to IAS 1 to defer the effective date of the Amendments to IAS 1 – Classification of Liabilities as Current or Non-Current by one year to annual reporting periods beginning on or after 1 January 2023 (further information). An earlier application of the amendments to IAS 1 continues to be permitted.

Classification of Liabilities as Current or Non-current was issued in January 2020, effective for annual reporting periods beginning on or after 1 January 2022 (we reported). However, in response to the covid-19 pandemic, the IASB has deferred the effective date by one year to provide companies with more time to implement any classification changes resulting from those amendments.

Classification of Liabilities as Current or Non-current clarifies that the classification of liabilities as current or non-current requires an assessment of whether an entity has the right to defer settlement of a liability and not whether the entity will exercise that right, i.e. classification is unaffected by management intentions or expectations.