EFRAG seeks comments on its draft Endorsement Advice on Supplier Finance Arrangements (Amendments to
EFRAG seeks comments on its draft Endorsement Advice on Supplier Finance Arrangements (Amendments to
The objective of the Amendments is to enhance the transparency of supplier finance arrangements and their effects on a company’s liabilities, cash flows and exposure to liquidity risk through additional disclosure requirements.
EFRAG's overall preliminary assessment is that the Amendments satisfy the criteria for endorsement for use in the EU and therefore EFRAG recommends its endorsement.
However, due to the concern from some constituents about the challenges for an entity to disclose the information required under paragraph 44H(b)(ii) of the Amendments (the disclosure of the carrying amount of financial liabilities that are part of supplier finance arrangements for which suppliers have already received payment), EFRAG is conducting limited outreach activities in parallel to this consultation. The result of the outreach will be considered in the endorsement advice letter to be submitted to the European Commission.
Comments of the draft endorsement advice are requested by 11 September 2023.
EFRAG's draft endorsement advice letter and invitation to comment may be accessed here.
EFRAG's overall preliminary assessment is that the Amendments satisfy the criteria for endorsement for use in the EU and therefore EFRAG recommends its endorsement.
However, due to the concern from some constituents about the challenges for an entity to disclose the information required under paragraph 44H(b)(ii) of the Amendments (the disclosure of the carrying amount of financial liabilities that are part of supplier finance arrangements for which suppliers have already received payment), EFRAG is conducting limited outreach activities in parallel to this consultation. The result of the outreach will be considered in the endorsement advice letter to be submitted to the European Commission.
Comments of the draft endorsement advice are requested by 11 September 2023.
EFRAG's draft endorsement advice letter and invitation to comment may be accessed here.