4.3 New standards, interpretations and amendments to published standards that have been published by the International Accounting Standards Board (IASB) and not yet approved by the European Union

The “Supplier Finance Arrangements’ (amendments to IAS 7 and IFRS 7) include:

• do not define supplier finance arrangements. Instead, the amendments describe the characteristics of an arrangement for which an entity is required to provide the information. The amendments note that arrangements that are solely credit enhancements for the entity or instruments used by the entity to settle directly with a supplier the amounts owed are not supplier finance arrangements.
• entities will have to disclose in the notes information that enables users of financial statements to assess how supplier finance arrangements affect an entity’s liabilities and cash flows and to understand the effect of supplier finance arrangements on an entity’s exposure to liquidity risk and how the entity might be affected if the arrangements were no longer available to it,
• adding to IAS 7 additional disclosure requirements about:
• the terms and conditions of the supplier finance arrangements,
• for the arrangements, as at the beginning and end of the reporting period:

1. the carrying amounts of financial liabilities that are part of the arrangement and the associated line item presented,
2. the carrying amount of financial liabilities disclosed under a) for which suppliers have already received payment from the finance providers,
3. the range of payment due dates of financial liabilities disclosed under a) and comparable trade payables that are not part of a supplier finance arrangement; and

• the type and effect of non-cash changes in the carrying amounts of the financial liabilities that are part of the arrangement,
• add supplier finance arrangements as an example within the liquidity risk disclosure requirements in IFRS 7.

Date of application: annual periods beginning on or after 1 January 2024.

The amendment to IAS 21:

• specify when a currency is exchangeable into another currency and when it is not — a currency is exchangeable when an entity is able to exchange that currency for the other currency through markets or exchange mechanisms that create enforceable rights and obligations without undue delay at the measurement date and for a specified purpose; a currency is not exchangeable into the other currency if an entity can only obtain an insignificant amount of the other currency,
• specify how an entity determines the exchange rate to apply when a currency is not exchangeable — when a currency is not exchangeable at the measurement date, an entity estimates the spot exchange rate as the rate that would have applied to an orderly transaction between market participants at the measurement date and that would faithfully reflect the economic conditions prevailing,
• require the disclosure of additional information when a currency is not exchangeable — when a currency is not exchangeable an entity discloses information that would enable users of its financial statements to evaluate how a currency’s lack of exchangeability affects, or is expected to affect, its financial performance, financial position and cash flows.

Date of application: annual periods beginning on or after 1 January 2025.