BDO has published IFRS Accounting Standards In Practice – Classification of Loans as Current or Non-current (2024/2025).
The IASB issued amendments to IAS 1 Presentation of financial Statements in January 2020 (Classification of Liabilities as Current or Non-current) and subsequently, in October 2022 (Non-current Liabilities with Covenants). The amendments, among other changes, introduced certain requirements related to determination of the existence of a right at the end of the reporting period to defer settlement of a liability with covenants. These amendments are effective for annual reporting periods beginning on or after 1 January 2024.
BDO’s publication provides an overview of the requirements of IAS 1 related to the classification of loans with covenants as current or non-current. It also includes a flow chart to help in determining this classification, along with application of the flow chart to multiple scenarios. The focus of the publication is on the classification of loans with covenants as current or non-current. It does not address the classification of other liabilities.
