• Accounting Alert September 2020

Amendments to classification of liabilities deferred by one year

The International Accounting Standards Board (IASB) has deferred the amendments to IAS 1 Presentation of Financial Statements relating to classification of liabilities as current or non-current. Originally due to be effective for annual periods commencing on or after 1 January 2022, the new requirements will only apply from 1 January 2023.

The New Zealand Accounting Standards Board (NZASB) has followed suit and deferred the effective date of the New Zealand equivalent standard  to also apply from 1 January 2023.

The amendments apply retrospectively and so may require restatement of liabilities classified as current or non-current in the comparative balance sheets for years ending 31 December 2022, 31 March 2023 or 30 June 2023.

The IASB noted pressures caused by the COVID-19 pandemic as the reason for the deferral, including:

  • Making it challenging for entities to implement the changes in classification of liabilities, and
  • Delays and extended durations of renegotiations to loan covenants required as a result of the amendments.

However, in deferring these amendments, the IASB did note that the amendments clarify, but do not fundamentally change, the classification requirements.


For more on the above, please contact your local BDO representative.