SOCPA Provides Remarks on the Preliminary Decision of the International Standards Interpretations Committee
The Saudi Organization for Chartered and Professional Accountants provided its view on the initial decision of the International Financial Reporting Interpretations Committee of the International Accounting Standards Board regarding how to classify liabilities as current or non-current when there are conditions associated with long-term liabilities such as the requirement to fulfill a certain percentage of working capital to maintain the entity's right to delay payment for a period of not less than twelve months from the date of the report.
This initial decision came to clarify the requirements of the recent amendment introduced by the International Board to International Accounting Standard No. 1 regarding the classification of liabilities.
In its comment on the initial decision, SOCPA considered the examples provided by the Interpretations Committee to be appropriate, as the requirements of the standard apply to them.
In its response, SOCPA indicated the need to provide clarifications for the requirements of the amendment referred to above, especially with regard to the concept of “the essence of the right to postponement” mentioned in Paragraph 72A of the amendment, as that concept was not included in the amendment draft, and did not include the foundations of the conclusion attached to the amendment. An explanation or clarification of the intention of the International Board in this concept in the context of classification of liabilities.