Covenant breach

[khashkhashyan]

Hello Dears,

We have a instance where the client breached the loan covenant as at 31.12.23 (reporting period) but didn't classified it to current. The loan agreement has a curing period of 15 days after reporting period and client could fix/complied with it within 15 days. Am I right that the curing period is the same grace period which must be at least 12 months so that the loan can be classified still non-current as of 31.12.23.

Thanks in advance.

[DJP]

It should be classified as current because it seems that the entity does not have the right at the end of the reporting period to defer settlement for more than 12 months after the reporting period.

[khashkhashyan]

Agree DJP and thank you for response !