Balance sheets are short-term assets

Balance sheet structure according to maturity in accordance with IAS 1

DRSC press release from 07/19/2005

The Accounting Interpretations Committee (RIC) of the DRSC has adopted the final interpretation as RIC 1 â € œBalance sheet structure according to maturity in accordance with IAS 1 Presentation of Financial Statementsâ €. RIC 1 is the guideline for all companies that prepare their individual and consolidated financial statements (including interim reporting) in accordance with IAS / IFRS.


Practice info!

For IAS / IFRS financial statements, a balance sheet structure according to maturity will in future be the rule. The previous option (IAS 1.53 old version) to structure the balance sheet either exclusively according to maturity or according to liquidity has been abolished as part of the IASB Improvements. RIC 1 specifies the minimum classification requirements in IAS 1. The main statements of RIC 1 are:

  • The border lies between short-term and long-term balance sheet items on the assets and liabilities side basicallyat 12 months (Time to realize assets or pay off debts).
  • exception: Exceeds that Duration of a business cycle 12 months, the assets or debts assigned to it are nevertheless shown as short-term (start of a business cycle: procurement of the resources required for the service creation process; end: receipt of the means of payment for the sale of the products / services created in this process ).
  • Supplies as requirements and liabilities from goods and services are therefore basically the short term Allocate balance sheet items. Exception: For trade accounts receivable, for example, unusually long payment terms have been agreed (note the explanations in the appendix in this case!).
  • A respective Breakdown of short-term and long-term assets and liabilities for closeness to liquidity the individual included balance sheet items may be appropriate. Otherwise, the structure of the balance sheet according to liquidity is only possible for insurance companies, investment companies, holding companies and financial institutions (IAS 1.54), provided that the balance sheet of such companies consists almost entirely of financial instruments.
  • At intangible assets and Property, plant and equipment there is no division into a short-term and a long-term part â € “not even if their useful life is nearing the end.
  • are Assets/ Disposal groups for sale, they are to be shown under the designation "Long-term assets and disposal groups held for sale" as the last item in the short-term assets.
  • Long term financial assets or Debtthat within the next 12 months after the balance sheet date realized or repaid are, however, to be shown at short notice.
  • Provisions, finance leases â € “ Liabilities of the lessee or receivables of the lessor - must be divided into their short-term and long-term parts. Exception: pension provisions, which are to be allocated to long-term debts, provided that no breakdown is made.
  • The conditions on the balance sheet date are always decisive (the valuation principle is not valid in the balance sheet, only in the appendix).

Practical note:

For illustration purposes, RIC includes 1 Example of a balance sheet structure in the German version, which has been supplemented by an English translation on the BC homepage, see pdf file here).


[Note d. Red.]

BC 8/2005