The European Union has published a Commission Regulation (EU) 2023/2822 amending Regulation (EU) 2023/1803 as regards International Accounting Standard (IAS) 1. The Commission Regulation endorses the following Amendments to IAS 1 Presentation of Financial Statements:

• Classification of Liabilities as Current or Non-current;
• Classification of Liabilities as Current or Non-current – Deferral of Effective Date; and
• Non-current Liabilities with Covenants.

The endorsement of these amendments is now reflected in the updated EFRAG Endorsement Status Report.

The Amendments aim to clarify the principles in IAS 1 for the classification of liabilities as either current or non-current, mainly clarifying the notion of settlement, specifying how an entity classifies a liability arising from a loan arrangement with covenants as current or non-current, and regulating the disclosures to be provided when an entity has loan arrangements with covenants that could require the loan arrangement to become payable within twelve months after the reporting period.

The Amendments have become effective for annual periods beginning on or after 1 January 2024, with earlier application permitted. 

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