AASB 2023-3 Amendments to Australian Accounting Standards – Disclosure of Non-current Liabilities with Covenants: Tier 2

Tuesday, June 27, 2023

The AASB has issued AASB 2023-3, which amends AASB 1060 to clarify the criteria for classifying a liability as current or non-current and improve the information disclosed in financial statements about certain non-current liabilities with covenants.

The amendments:

1. clarify that a liability is classified as non-current if an entity has the right at the reporting date to defer settlement of the liability for at least twelve months after the reporting date;
2. clarify the reference to settlement of a liability by the issue of equity instruments in classifying liabilities; and
3. require the disclosure of information that enables users of the financial statements to understand the risk that non-current liabilities with covenants could become repayable within twelve months.

The amendments are consistent with amendments made to AASB 101 Presentation of Financial Statements by AASB 2020-1 Amendments to Australian Accounting Standards – Classification of Liabilities as Current or Non-Current and AASB 2022-6 Amendments to Australian Accounting Standards – Non-current Liabilities with Covenants.

AASB 2023-3 applies to annual periods beginning on or after 1 January 2024, with earlier application permitted.  This is the same application as the amendments to AASB 101.