Supplier Finance Arrangements
The amending standard Supplier Finance Arrangements introduces disclosures to enhance transparency of an entity’s supplier finance arrangements and their effects on its liabilities, cash flows and exposure to liquidity risk.
Commencement and Application
Application of the amendments is required for accounting periods which begin on or after 1 January 2024.
Application is permitted for accounting period that begin before 1 January 2024 but have not ended or do not end before 10 August 2023.
Reduced Disclosure Regime
The amending standard Supplier Finance Arrangements RDR exempts Tier 2 for-profit entities from all of the new disclosure requirements.
Amendments
What do the amendments require:
An entity is required to disclose the following for their supplier finance arrangements in aggregate:
- the terms and conditions of the arrangements; and
- as at the beginning and end of the reporting period:
- the carrying amounts and associated line items presented in the entity’s statement of financial position of the financial liabilities that are part of a supplier finance arrangement;
- the carrying amounts and associated line items of the financial liabilities disclosed under these requirements for which suppliers have already received payment from the finance providers;
- the range of payment due dates for both the financial liabilities disclosed under these requirements 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 disclosed under these requirements.