{"id":"F2023L00953","name":"Accounting Standard AASB 2023-1 Amendments to Australian Accounting Standards – Supplier Finance Arrangements","slug":"accounting-standard-aasb-2023-1-amendments-to-australian-accounting-standards-supplier-finance-arran","collection":"legislative_instrument","jurisdiction":"commonwealth","status":"in_force","isInForce":true,"actNumber":null,"makingDate":null,"administeringDepartment":null,"currentVersion":{"id":104600,"registerId":"commonwealth-F2023L00953-current","compilationNumber":null,"startDate":"2026-04-03","status":"InForce","reasons":null,"registeredAt":null},"sections":[{"sectionNumber":"Obtaining a copy of this Accounting Stan","sectionType":"part","heading":"Obtaining a copy of this Accounting Standard","content":"# Obtaining a copy of this Accounting Standard\n\nThis Standard is available on the AASB website: www.aasb.gov.au.\n\nAustralian Accounting Standards Board\n\nPO Box 204\n\nCollins Street West\n\nVictoria 8007\n\nAUSTRALIA\n\nPhone: (03) 9617 7600\n\nE-mail: standard@aasb.gov.au\n\nWebsite: www.aasb.gov.au","sortOrder":0},{"sectionNumber":"Other enquiries","sectionType":"part","heading":"Other enquiries","content":"# Other enquiries\n\nPhone: (03) 9617 7600\n\nE-mail: standard@aasb.gov.au\n\nCOPYRIGHT\n\n© Commonwealth of Australia 2023\n\nThis AASB Standard contains IFRS Foundation copyright material. Reproduction within Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use subject to the inclusion of an acknowledgment of the source. Requests and enquiries concerning reproduction and rights for commercial purposes within Australia should be addressed to The Managing Director, Australian Accounting Standards Board, PO Box 204, Collins Street West, Victoria 8007.\n\nAll existing rights in this material are reserved outside Australia. Reproduction outside Australia in unaltered form (retaining this notice) is permitted for personal and non-commercial use only. Further information and requests for authorisation to reproduce IFRS Foundation copyright material for commercial purposes outside Australia should be addressed to the IFRS Foundation at www.ifrs.org.\n\nISSN 1036-4803","sortOrder":1},{"sectionNumber":"Contents","sectionType":"part","heading":"Contents","content":"# Contents\n\nPreface\n\nAccounting Standard\n\nAASB 2023-1 Amendments to Australian Accounting Standards – Supplier Finance Arrangements\n\nfrom page\n\nObjective 5\n\nApplication 5\n\nAmendments to AASB 107 5\n\nAmendments to AASB 7 6\n\nCommencement of the legislative instrument 7\n\naVailable on the AASB website\n\nIASB Implementation guidance – Amendments\n\nIASB Bases for Conclusions – Amendments\n\nAustralian Accounting Standard AASB 2023-1 Amendments to Australian Accounting Standards – Supplier Finance Arrangements is set out on pages 5–7. All the paragraphs have equal authority.","sortOrder":2},{"sectionNumber":"Preface","sectionType":"part","heading":"Preface","content":"# Preface\n\nStandards amended by AASB 2023-1\n\nThis Standard makes amendments to AASB 107 Statement of Cash Flows (August 2015) and AASB 7 Financial Instruments: Disclosures (August 2015).\n\nThese amendments arise from the issuance of International Financial Reporting Standard Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7) by the International Accounting Standards Board (IASB) in May 2023.\n\nMain features of this Standard\n\nMain requirements\n\nThis Standard amends AASB 107 and AASB 7 to require an entity to provide additional disclosures about its supplier finance arrangements. The additional information will enable users of financial statements to assess how supplier finance arrangements affect an entity’s liabilities, cash flows and exposure to liquidity risk.\n\nThe amendments require an entity to disclose the terms and conditions of the arrangements, the carrying amount of the liabilities that are part of the arrangements, the carrying amounts of those liabilities for which the suppliers have already received payment from the finance providers, the range of payment due dates and the effect of non-cash changes.\n\nApplication date\n\nThis Standard applies to annual periods beginning on or after 1 January 2024. Earlier application is permitted.","sortOrder":3},{"sectionNumber":"Accounting Standard AASB 2023-1","sectionType":"part","heading":"Accounting Standard AASB 2023-1","content":"# Accounting Standard AASB 2023-1\n\nThe Australian Accounting Standards Board makes Accounting Standard AASB 2023-1 Amendments to Australian Accounting Standards – Supplier Finance Arrangements under section 334 of the Corporations Act 2001.\n\nKeith Kendall\n\nDated 22 June 2023 Chair – AASB","sortOrder":4},{"sectionNumber":"Objective","sectionType":"part","heading":"Objective","content":"## Objective\n\nThis Standard amends:\n\n(a) AASB 107 Statement of Cash Flows (August 2015); and\n\n(b) AASB 7 Financial Instruments: Disclosures (August 2015);\n\nas a consequence of the issuance of International Financial Reporting Standard Supplier Finance Arrangements (Amendments to IAS 7 and IFRS 7) by the International Accounting Standards Board in May 2023.","sortOrder":6},{"sectionNumber":"Application","sectionType":"part","heading":"Application","content":"## Application\n\nThe amendments set out in this Standard apply to entities and financial statements in accordance with the application of AASB 107 and AASB 7 set out in AASB 1057 Application of Australian Accounting Standards.\n\nThis Standard applies to annual periods beginning on or after 1 January 2024\\. This Standard may be applied to annual periods beginning before 1 January 2024. When an entity applies this Standard to such an annual period, it shall disclose that fact.\n\nThis Standard uses underlining, striking out and other typographical material to identify some of the amendments to a Standard, in order to make the amendments more understandable. However, the amendments made by this Standard do not include that underlining, striking out or other typographical material. Ellipses (…) are used to help provide the context within which amendments are made and also to indicate text that is not amended.","sortOrder":7},{"sectionNumber":"Amendments to AASB 107","sectionType":"part","heading":"Amendments to AASB 107","content":"## Amendments to AASB 107\n\n| Paragraphs 44F–44H and their related heading and paragraphs 62–63 are added. For ease of reading, these paragraphs and the heading have not been underlined. The heading before paragraph 53 is amended. New text in that heading is underlined. |\n| ------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------ |\n\nSupplier finance arrangements\n\n    44F An entity shall disclose information about its supplier finance arrangements (as described in paragraph 44G) that enables users of financial statements to assess the effects of those arrangements on the entity’s liabilities and cash flows and on the entity’s exposure to liquidity risk.\n    44G Supplier finance arrangements are characterised by one or more finance providers offering to pay amounts an entity owes its suppliers and the entity agreeing to pay according to the terms and conditions of the arrangements at the same date as, or a date later than, suppliers are paid. These arrangements provide the entity with extended payment terms, or the entity’s suppliers with early payment terms, compared to the related invoice payment due date. Supplier finance arrangements are often referred to as supply chain finance, payables finance or reverse factoring arrangements. Arrangements that are solely credit enhancements for the entity (for example, financial guarantees including letters of credit used as guarantees) or instruments used by the entity to settle directly with a supplier the amounts owed (for example, credit cards) are not supplier finance arrangements.\n    44H To meet the objectives in paragraph 44F, an entity shall disclose in aggregate for its supplier finance arrangements:\n    (a) the terms and conditions of the arrangements (for example, extended payment terms and security or guarantees provided). However, an entity shall disclose separately the terms and conditions of arrangements that have dissimilar terms and conditions.\n    (b) as at the beginning and end of the reporting period:\n    (i) the carrying amounts, and associated line items presented in the entity’s statement of financial position, of the financial liabilities that are part of a supplier finance arrangement.\n    (ii) the carrying amounts, and associated line items, of the financial liabilities disclosed under (i) for which suppliers have already received payment from the finance providers.\n    (iii) the range of payment due dates (for example, 30–40 days after the invoice date) for both the financial liabilities disclosed under (i) and comparable trade payables that are not part of a supplier finance arrangement. Comparable trade payables are, for example, trade payables of the entity within the same line of business or jurisdiction as the financial liabilities disclosed under (i). If ranges of payment due dates are wide, an entity shall disclose explanatory information about those ranges or disclose additional ranges (for example, stratified ranges).\n    (c) the type and effect of non-cash changes in the carrying amounts of the financial liabilities disclosed under (b)(i). Examples of non-cash changes include the effect of business combinations, exchange differences or other transactions that do not require the use of cash or cash equivalents (see paragraph 43).\n    …\n\nEffective date and transition\n\n    53 …\n    62 AASB 2023-1 Amendments to Australian Accounting Standards – Supplier Finance Arrangements, issued in June 2023, added paragraphs 44F–44H. An entity shall apply those amendments for annual reporting periods beginning on or after 1 January 2024. Earlier application is permitted. If an entity applies those amendments for an earlier period, it shall disclose that fact.\n    63 In applying AASB 2023-1, an entity is not required to disclose:\n    (a) comparative information for any reporting periods presented before the beginning of the annual reporting period in which the entity first applies those amendments.\n    (b) the information otherwise required by paragraph 44H(b)(ii)–(iii) as at the beginning of the annual reporting period in which the entity first applies those amendments.\n    (c) the information otherwise required by paragraphs 44F–44H for any interim period presented within the annual reporting period in which the entity first applies those amendments.","sortOrder":8},{"sectionNumber":"Amendments to AASB 7","sectionType":"part","heading":"Amendments to AASB 7","content":"## Amendments to AASB 7\n\n| Paragraph 44JJ is added. In Appendix B, paragraph B11F is amended. Deleted text is struck through and new text is underlined. |\n| ----------------------------------------------------------------------------------------------------------------------------- |\n\nEffective date and transition\n\n    …\n    44JJ AASB 2023-1 Amendments to Australian Accounting Standards – Supplier Finance Arrangements, issued in June 2023, which also amended AASB 107 Statement of Cash Flows, amended paragraph B11F. An entity shall apply that amendment when it applies the amendments to AASB 107.\n    …\n    Appendix B  \n    Application guidance\n    …\n\nNature and extent of risks arising from financial instruments  \n(paragraphs 31–42)\n\n    …\n    Quantitative liquidity risk disclosures (paragraphs 34(a) and 39(a) and (b))\n    …\n    B11F Other factors that an entity might consider in providing the disclosure required in paragraph 39(c) include, but are not limited to, whether the entity:\n    (a) has committed borrowing facilities (eg commercial paper facilities) or other lines of credit (eg stand-by credit facilities) that it can access to meet liquidity needs;\n    (b) holds deposits at central banks to meet liquidity needs;\n    (c) has very diverse funding sources;\n    (d) has significant concentrations of liquidity risk in either its assets or its funding sources;\n    (e) has internal control processes and contingency plans for managing liquidity risk;\n    (f) has instruments that include accelerated repayment terms (eg on the downgrade of the entity’s credit rating);\n    (g) has instruments that could require the posting of collateral (eg margin calls for derivatives);\n    (h) has instruments that allow the entity to choose whether it settles its financial liabilities by delivering cash (or another financial asset) or by delivering its own shares; or\n    (i) has instruments that are subject to master netting agreements; or\n    (j) has accessed, or has access to, facilities under supplier finance arrangements (as described in paragraph 44G of AASB 7) that provide the entity with extended payment terms or the entity’s suppliers with early payment terms.","sortOrder":9},{"sectionNumber":"Commencement of the legislative instrume","sectionType":"part","heading":"Commencement of the legislative instrument","content":"## Commencement of the legislative instrument\n\nFor legal purposes, this legislative instrument commences on 31 December 2023.","sortOrder":10}],"analysis":{"kimi_summary":{"content_quality":"ok","complexity_score":4,"scope_assessment":{"changed":false,"description":"This is a targeted disclosure amendment maintaining its original scope. It does not expand beyond supplier finance arrangements to capture broader financing arrangements, and the amendments remain tightly focused on transparency around these specific instruments without creeping into broader cash flow or financial instrument recognition requirements."},"complexity_factors":["Amendment structure requires cross-referencing to two existing standards (AASB 107 and AASB 7) to understand full context","Nested definitions: 'supplier finance arrangements' defined by reference to characteristics, then exclusions (credit enhancements, credit cards), then examples of what it includes","Conditional disclosure requirements with aggregation rules — disclose in aggregate unless terms are 'dissimilar', requiring judgment","Stratified disclosure requirements for payment due dates with subjective trigger ('if ranges are wide')","Transitional relief provisions with three separate exemptions from comparative disclosure requirements","Cross-reference to AASB 1057 for application scope (entities covered)","Typographical conventions (underlining, striking out) explained but noted as not part of the actual legal text"],"plain_english_summary":"This standard requires large companies to disclose use of supplier‑finance (supply‑chain finance/reverse factoring), making clear how much financing they rely on, how it affects reported liquidity, and the key terms and timing that can mask cash stress. It affects corporations, investors, and auditors by improving transparency about off‑balance financing risks. It applies to annual reports from 1 January 2024 (early adoption allowed)."},"flash_summary_failed":{"failed":true,"reason":"Unauthenticated. Configure AI_GATEWAY_API_KEY or use a provider module. Learn more: https://ai-sdk.dev/unauthenticated-ai-gateway","source":"analysis-cron"},"flash_summary":{"complexity_score":4,"scope_assessment":{"changed":false,"description":"This Standard adopts the IASB's supplier finance disclosure amendments into AASB 107 and AASB 7 without expanding or narrowing which entities are subject beyond the existing scope of those Standards. It adds specific disclosure obligations and transition relief (Objective; Application; paras 44F–44H; 62–63) but does not alter the foundational coverage of AASB 107/AASB 7."},"complexity_factors":["New definition and scope of 'supplier finance arrangements' requiring entities to identify arrangements that meet the definition (para 44G).","Detailed aggregated disclosure items: terms, carrying amounts and line‑item mapping, amounts already paid by finance providers, payment‑due ranges, and non‑cash changes (para 44H(a)–(c)).","Requirement to disclose comparable trade payables and to stratify or explain wide payment‑date ranges increases data‑segmentation work (para 44H(b)(iii)).","Separate disclosure required where arrangements have dissimilar terms, creating grouping and classification decisions (para 44H(a)).","Transition and relief rules limit comparative disclosures and beginning‑balance items on first application, adding timing and presentation choices (paras 62–63).","Interaction with AASB 7 liquidity‑risk guidance and Appendix B amendment expands the contextual disclosures preparers must consider (para 44JJ; amended B11F).","Mapping supplier‑finance liabilities to existing statement of financial position line items requires judgement and potential accounting‑systems changes (para 44H(b)(i)).","Permitted earlier application creates optional phasing issues for entities with differing reporting cycles (Application; para 62)."],"plain_english_summary":"Adds disclosure requirements to AASB 107 and AASB 7: entities must disclose aggregated information about supplier finance arrangements — terms, carrying amounts of related liabilities, amounts already paid by finance providers, payment‑due date ranges, and non‑cash changes.\n\nApplies to entities reporting under those Standards for annual periods beginning on or after 1 January 2024 (earlier application permitted). It aims to help users assess effects on liabilities, cash flows and liquidity risk and creates identification and disclosure tasks for preparers (paras 44F–44H, 62–63)."}},"importantCases":[],"_links":{"self":"/api/acts/accounting-standard-aasb-2023-1-amendments-to-australian-accounting-standards-supplier-finance-arran","history":"/api/acts/accounting-standard-aasb-2023-1-amendments-to-australian-accounting-standards-supplier-finance-arran/history","analysis":"/api/acts/accounting-standard-aasb-2023-1-amendments-to-australian-accounting-standards-supplier-finance-arran/analysis","conflicts":"/api/acts/accounting-standard-aasb-2023-1-amendments-to-australian-accounting-standards-supplier-finance-arran/conflicts","importantCases":"/api/acts/accounting-standard-aasb-2023-1-amendments-to-australian-accounting-standards-supplier-finance-arran/important-cases","documents":"/api/acts/accounting-standard-aasb-2023-1-amendments-to-australian-accounting-standards-supplier-finance-arran/documents"}}