BDO has published IFRS Accounting Standards In Practice — Classification of Loans as Current or Non-current (2024/2025).
One of the key aspects of IFRS accounting standards is the classification of borrowings as current or non-current in accordance with IAS 1. This classification has a significant impact on the financial statements of companies, especially in the context of liabilities with conditions such as covenants.
Amendments to IAS 1, introduced in 2024, expand the requirements for determining the existence of rights at the end of the reporting period of the deferral of covenants. This requires an important analysis of financial conditions and needs to develop the correct classification of the position. Such an analysis ensures the accuracy and reliability of the company's financial statements.
A publication from BDO, which provides an overview of the requirements of IAS 1 and a flowchart for the classification of loans with covenants, is a useful tool for the practical application of IFRS standards. It helps financial accounting specialists and auditors determine the correct classification of loans and ensure compliance with the standards.
If you have any questions about the classification of loans as current and non-performing under IFRS accounting standards, please contact us. Our specialists provide you with additional information and support in solving any questions that appear in this process.
Source BDO Global.
