Supplier Finance Arrangements

Supplier Finance Arrangements: Amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures (the Amendments) were approved for adoption by all members of the UK Endorsement Board on 28 November 2023.

A link to the Adoption Statement of the Amendments and the text of the Amendments can be found here.

The Amendments are not likely to lead to a significant change in accounting practice and do not meet the criteria for a post-implementation review under Regulation 11 in SI 2019/685.

Background

The Amendments were published on 25 May 2023 and are effective for annual reporting periods beginning on or after 1 January 2024, with early application permitted.

The Amendments complement the existing disclosure requirements in IFRS Accounting Standards that apply to supplier finance arrangements. They are aimed at providing users of financial statements with the information that enables them to assess the effect of supplier finance arrangements on an entity’s liabilities and cash flows, as well as on the entity’s exposure to liquidity risk.

The UKEB actively influenced the development of these amendments. Refer to work performed as part of the ‘Influencing Project’.  

UKEB Endorsement Criteria Assessment

On 20 July 2023 the UKEB published its Draft Endorsement Criteria Assessment (DECA) Supplier Finance Arrangements.

The public consultation period closed on 18 October 2023. Thank you to all stakeholders that provided feedback.

All responses received were considered when finalising the Endorsement Criteria Assessment (ECA). The final ECA was published on 30 November 2023. An accompanying Feedback Statement, describing how feedback received from stakeholders was addressed, was also published on the same date.

The following relevant documents are available at the foot of this page:

• DECA and Invitation to Comment
• Responses from stakeholders
• Final ECA
• Feedback Statement
• Due Process Compliance Statement (DPCS)

UKEB outreach

The UKEB project outreach included discussions with stakeholders and public consultation on the UKEB’s DECA.

UKEB meetings

The Amendments were discussed in the following UKEB meetings:

• 14 December 2022: IASB General Update
• 23 February 2023: IASB General Update
• 23 March 2023: IASB General Update
• 18 May 2023: Project Initiation Plan
• 13 July 2023: Draft Endorsement Criteria Assessment
• 19 October 2023: Draft Endorsement Criteria Assessment – Update on feedback received (Agenda paper 9: Appendix B)
• 16 November 2023: Adoption Package
• 14 December 2023: DPCS presented for noting