# Companies face stricter supply finance disclosures after Greensill collapse
Author:  Pal Sinha, Barnali 
Author URL: https://financedigest.com/author/pal-sinha-barnali
Published: 2023-05-25
Category: NEWS
Category URL: https://financedigest.com/category/news
Meta Title: New supply finance disclosures for companies after Greensill
Meta Description: Companies will have to reveal details of supplier loans starting January 2024, following lessons from Greensill Capital's downfall. Understand the impact
URL: https://financedigest.com/companies-face-stricter-supply-finance-disclosures-after-greensill-collapsehtml

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# Companies face stricter supply finance disclosures after Greensill collapse

LONDON (Reuters) – Companies will have to disclose details of loans for paying suppliers from January 2024, a global accounting standard setting body said on Thursday, drawing lessons from the collapse of Greensill Capital.

The International Accounting Standards Board (IASB) said companies will have to disclose the terms and conditions, amount of liabilities, ranges of payment due dates and liquidity risks from supplier finance arrangements.

Greensill Capital was a financing company that went bust in 2021 after one of its main insurers declined to renew its cover.

Companies could borrow cash from Greensill Capital to pay their suppliers early, effectively taking on debt, but such [supply chain](https://www.financedigest.com/uk-car-output-up-9-9-y-o-y-in-april-as-supply-chain-issues-ease.html "UK car output up 9.9% y-o-y in April as supply chain issues ease") finance did not have the same company disclosure requirements as more conventional forms of debt.

UK builder Carillion also collapsed under the weight of debt, much of it undisclosed, prompting calls in Britain’s parliament for [accounting reforms](https://www.financedigest.com/whisperclaims-urges-accountants-to-keep-calm-and-carry-on-despite-reforms-to-the-rd-tax-industry.html "WhisperClaims urges accountants to keep calm and carry on despite reforms to the R&D tax industry").

The new disclosure requirement will make visible a company’s usage of supplier [finance arrangements and allow investors to make better informed investment](https://www.financedigest.com/flexible-finance-the-importance-of-investment-in-changing-times.html "Flexible Finance: the importance of investment in changing times") decisions by demonstrating how that usage has affected the company’s operation,” IASB Chair Andreas Barckow said in a statement.

IASB accounting rules are used in more than 150 countries, and are mandatory in the European Union and Britain.

(Reporting by Huw Jones; Editing by Andrew Heavens)


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