Final amendments to IAS 7 and IFRS 7 on supplier finance arrangements

Keywords: Mazars, Thailand, IAS 7, IFRS 7, Supplier Finance Arrangements 

13 July 2023 

(the IASB press release is available here). 

These amendments result from an exposure draft published in November 2021 and supplement the IFRS Interpretations Committee's agenda decision of December 2020 on how to account for these agreements in the statement of financial position and the cash flow statement. 

The disclosures provided are intended to enable users of the financial statements of entities using these arrangements to: 

• assess the impact of such arrangements on the entity's liabilities and cash flows;  
• understand their effect on the entity's exposure to liquidity risk and how the entity might be affected if these arrangements were no longer available to it. 

The amendments require entities that use such arrangements to disclose:  

• the terms and conditions of each supplier finance arrangement; 
• the following quantified information, at the start and end of the reporting period: 

• • the carrying amount of financial liabilities that are part of the arrangement and the line item(s) in which those financial liabilities are presented; 
  • the carrying amount of those financial liabilities for which suppliers have already received payment from the finance providers, and the line item(s) in which they are presented; 
  • the range of payment due dates of financial liabilities that are part of a supplier finance arrangement and those of comparable trade payables that are not part of a supplier finance arrangement;  the nature and effects of non-cash changes in the carrying amounts of financial liabilities that are part of a supplier financing arrangement. 
• the nature and effects of non-cash changes in the carrying amounts of financial liabilities that are part of a supplier financing arrangement. 

These amendments will come into effect for reporting periods that are current at 1 January 2024, subject to endorsement by the European Union.  

Transitional relief is available for comparative information in the annual accounts for the year of first application and for disclosures in the interim accounts during the first year of application.