- our Offices our_offices.jpg
- our People our_people.jpg
- my Business my_business.jpg
- my Career my_career.jpg
- Creditor Info creditor_info.jpg
- Aged Care
- National News
- Corporate Recovery
- Business Advisory
- Thinking Ahead Issue 4
Our People in External Audit and Assurance Services
Current or non-current liability
AASB 101 can create issues in relation to financial agreements
The Centro case referred to above arose from misclassification of debt liabilities. Accounting standard AASB 101 has four conditions which each require an item to be classified as current. The fourth is where an entity does not have the legal right to defer settlement beyond twelve months.
This can create issues in relation to financial agreements. Judgement may need to be exercised on the meaning of terms and conditions. It is important that the detail in clauses in agreements be reviewed as a standard part of financial statement preparation. As the agreements may not always be clear, it may be necessary to obtain advice. Common issues include:
- The meaning of “material adverse events” which gives the lender the right to immediate repayment;
- The consequences of “facility review” clauses”;
- The ability to avoid “illegal acts” clauses; and
- Which clauses require the bank to have reasonable grounds and which automatically apply.
Audit and Assurance
+61 3 9018 4666
Think Ahead. Talk to Bentleys Today.
|Bentleys … So much more than accountants|
|The Bentleys Experience|