IASB Exposure Draft ED/2021/10 Supplier Finance Arrangements (Proposed amendments to IAS 7 and IFRS 7)


The proposals in this Exposure Draft are intended to complement the requirements in IFRS Standards that apply to reverse factoring and similar arrangements (as explained in the Agenda Decision Supply Chain Financing Arrangements – Reverse Factoring published by the IFRS Interpretations Committee in 2020). The proposed amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures would require entities to disclose additional information in the notes about those arrangements. The Exposure Draft uses ‘supplier finance arrangement’ to refer to a reverse factoring or other similar arrangement. Proposed paragraphs 44F–44I of IAS 7 set out the main proposals that would apply to all supplier finance arrangements (as described in proposed paragraph 44G).

The proposed amendments would affect an entity that, as a buyer, enters into one or more supplier finance arrangements (as described in the proposals), under which the entity, or its suppliers, can access financing for amounts the entity owes its suppliers. Users of financial statements would be able to obtain from financial statements the information that enables them to assess the effects of supplier finance arrangements on an entity’s liabilities and cash flows, as well as on its liquidity risk and risk management.

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Invitation to comment

The Exposure Draft is open for comment until 28 February 2022.

You may provide your comments via email to us at technical@masb.org.my

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