The International Accounting Standards Board has published a set of proposals for clarifying how entities classify debt, especially when it comes up for renewal.

The proposed amendments in the IASB’s exposure draft on Classification of Liabilities (Proposed amendments to IAS 1 aim to improve presentation in financial statements by clarifying the criteria for the classification of a liability as either current or non-current. 

The amendments would accomplish this by clarifying that the classification of a liability as either current or non-current is based on the entity’s rights at the end of the reporting period; and making clear the link between the settlement of the liability and the outflow of resources from the entity.

The proposals are open for public comment for 120 days. The IASB is asking for comments to be sent by June 10, 2015. The exposure draft is available here.

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