IAS 1 - Deferral of Effective Date - Classification of Liabilities

On 10 February 2015, the IASB published ED/2005/1 Classification of Liabilities and requested comments by 10 June 2015. The proposed amendments were designed to improve prese​n​tation in financial statements by clarifying the criteria for the classification of a liability as either current or non-current. The proposed amendments intend to:

• clarify 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
  

• make clear the link between the settlement of the liability and the outflow of resources from the entity.

In January 2020 the IASB issued Classification of Liabilities as Current or Non-current, which amended IAS 1  Presentation of Financial Statements​ with an effective date of annual reporting period beginning on or after 1 January 2022, The amendments of IAS 1 can be found in the Project: IAS 1 Amendments- Classification of Liabilities as Current or Non-current​. However, in response to the covid-19 pandemic, on 15 July 2020, 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 is now effective for annual reporting periods beginning on or after 1 January 2023.

On ​22 June 2021 the IASB tentatively decided to amend IAS 1 to defer the effective date of the 2020 amendments to no earlier than 1 January 2024. ​

These amendments were accordingly reflected in the amendments to which EFRAG provided an endorsement advice on to the European Commission (see the EFRAG project IAS 1 - Amendments - Classification of Liabilities as Current or Non-current).