EFRAG's Endorsement Advice on Supplier Finance Arrangements - Amendments to IAS 7 and IFRS 7
On 25 May 2023, the IASB issued Supplier
Finance Arrangements (Amendments to IAS 7 and IFRS 7) (‘the Amendments’) which
was initially issued as an Exposure Draft ED/2021/10 in March 2022.
The objective of
the Amendments is to enhance the transparency of supplier finance arrangements
and their effects on a company’s liabilities, cash flows and exposure to
liquidity risk through additional disclosure requirements.
The Amendments
shall be applied for annual periods beginning on or after 1 January 2024, with
earlier application permitted. However, there are some transition provisions
that provide relief for the first year of application.
EFRAG has
submitted its Endorsement Advice relating to the Amendments for use in the
European Union and European Economic Area. EFRAG assesses that the
Amendments meet the technical endorsement criteria of the IAS Regulation and is
conducive to the European public good. EFRAG therefore recommends
its endorsement. EFRAG's recommendation can be found in the letter to the
European Commission and the accompanying appendices.
The
Endorsement Advice Letter to the European Commission can be found here.
EFRAG has also
updated its Endorsement Status Report, which can be downloaded here on EFRAG's web
page.