IFRS for SMEs / Third edition changes / Section 7 in the third edition: financing liabilities and supplier finance
Section 7 in the third edition: financing liabilities and supplier finance
Two new cash-flow disclosures: a reconciliation of liabilities arising from financing activities, and information about supplier finance arrangements.
What changes
- 7.19A Reconcile the opening and closing balances of liabilities from financing activities, separating cash flows from non-cash changes.
- 7.19B–7.19C Disclose supplier finance arrangements, such as reverse factoring, and their effect on liabilities and cash flows.
What to prepare
- List every loan, vehicle-finance and shareholder-loan facility with its opening and closing balance.
- Identify non-cash changes, such as a vehicle financed directly by the bank or interest capitalised to a loan.
- Ask whether any supplier is paid through a bank or finance provider on extended terms.
How Sight handles it
On the third edition, the borrowings note reconciles each class of financing liability from the ledger. Non-cash changes cannot be read from the ledger and are left for the accountant. Supplier finance is a confirmation on the transition checklist.
Section 7: Statement of Cash Flows: the section in full.
Other third-edition changes
- Section 2 in the third edition: concepts and pervasive principles
- Section 3 in the third edition: material accounting policy information
- Section 4 in the third edition: disaggregating line items
- Section 6 in the third edition: dividends declared after year end
- Section 8 in the third edition: material policies and judgements
- Section 11 in the third edition: one section for financial instruments, ageing and maturity
- Section 12 in the third edition: the new fair value section
- Section 19 in the third edition: business combinations
- Section 23 in the third edition: the five-step revenue model
- Section 29 in the third edition: uncertain tax treatments
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