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.