IAS 1Chapter 4Lesson 2
Disclosure on covenants and breach before the reporting date
Step 1 of 4Learning objectives
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A non-current liability subject to covenants to be met within twelve months calls for disclosure about the risk of becoming repayable; a breach before the reporting date makes the loan current despite a later waiver.
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Learning objectives
- Explain the purpose of the disclosure on liabilities subject to covenants.
- Identify the situations in which this disclosure is required.
- Analyse the effect of a breach before the reporting date followed by a waiver obtained after it (advanced level).
- Record the reclassification as current (advanced level).