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Hello Tutor, could you please help me in understanding this para of IAS 1?
”The right to defer the payment must exist at the reporting date, so even if the lender has agreed after the reporting date, and before the financial statements are authorised for issue, not to demand payment as a consequence of the breach, the loan must be classified as current if that agreement was not in place at the reporting date (IAS 1: para. 74)”.
If the right to defer the payment exist at the reporting date (entity) why even then it will be classified as current?
If a company breaches a loan covenant, then NCL may become CL. That’s all you need for the exam.
Okay. This was copied from BPP Text book. because I was reading a question from BPP kit and there I read about all this so that is why referred the book.. I don’t remember the question name at the moment.
Apart from exam questions, is it recommended to read questions from the exam kit, cause there I get stuck.
Thank you.
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