BC34 The IASB developed the disclosure requirements in paragraph 44H of IAS 7 to achieve the disclosure objectives in paragraph 44F of IAS 7. An entity is required to disclose:

(a) the terms and conditions of its supplier finance arrangements. This disclosure is to inform users of financial statements that such arrangements are in place and to explain their nature.

(b) the carrying amounts of financial liabilities, and associated line items, as required by paragraph 44H(b)(i) of IAS 7. This disclosure is to show the size of the entity’s supplier finance arrangements and the line items in which the financial liabilities that are part of those arrangements are presented.

(c) the carrying amounts of financial liabilities, and associated line items, for which suppliers have already received payment from the finance providers, as required by paragraph 44H(b)(ii) of IAS 7. This disclosure is to enable users of financial statements:

(i) to analyse the entity’s liabilities and their effects on operating and financing cash flows; and

(ii) to understand the effect of supplier finance arrangements on the entity’s exposure to liquidity risk and how the entity might be affected if the arrangements were no longer available to it.