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Liquidity Risk Maturity Analysis: Lease liabilities back in.

It’s official, lease liabilities must be included in the financial liability maturity analysis.

The JSE released its proactive monitoring report on its limited scope thematic review earlier this month in which it claims that the requirement to disclose liquidity information stems from IFRS 7 Financial Instruments Disclosures. While rights and obligations under leases recognised in accordance with IFRS 16 Leases is excluded from the scope of IFRS 9 Financial Instruments, the same scope exclusion does not apply to IFRS 7. Lease liabilities, being financial liabilities, are therefore subject to the IFRS 7 disclosure requirements.

In last month’s Tech Trends it was noted that paragraph 58 of IFRS 16 requires the maturity analysis of lease liabilities be disclosed separately from the maturity analysis of other financial liabilities.

Despite the JSE’s finding appearing to be contrary to the requirements of IFRS, many preparers will be relieved to rather include the analysis in one place, now they can.