IASB issued exposure draft on IAS 7 Statement of Cash Flows and IFRS 9 Financial Instruments: Disclosures

The International Accounting Standards Board (IASB) has issued an exposure draft to amend IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures. IASB states that currently the information entities provide about supplier finance arrangements falls short of meeting investor information needs. By this, the IASB is proposing a disclosure objective and requirements that would require to disclose information to enable users of financial statements to assess the effects of the entity’s supplier finance arrangements and also highlight the required disclosure of liquidity risk and risk management and of non-cash changes.

This proposal would affect an entity, as a buyer, enters into one or more supplier finance arrangements, under which the entity, or its suppliers, can access financing for amounts the entity owes its suppliers. The International Accounting Standards Board (IASB) invites comments on the said proposal up to 28 March 2022.

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