IAS 1Chapter 4Lesson 1
Right to defer and covenants: classifying a loan at the end of the period
Step 1 of 8Learning objectives
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The classification of a liability depends on the rights existing at the end of the period; a conditional right to defer requires compliance at the end of the period, and only covenants to be met at the end of the period or before count.
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Learning objectives
- Explain what the 2020 amendment clarified and distinguish the right existing at the end of the period from management's expectation.
- Explain and determine whether a right to defer subject to conditions exists at the end of the period.
- Distinguish covenants to be met at the end of the period or before from those to be met after.
- Calculate the non-current portion of a loan and record its reclassification as current.