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IASB: Proposed amendments to IAS37 Provisions
- 21 November 2024
- Financial Reporting
- South African Accounting Academy
Summary:
The International Accounting Standards Board (IASB) has published an Exposure Draft (ED) for consultation, aimed at improving the requirements for recognising and measuring provisions on company balance sheets.
Article:
Provisions are liabilities of uncertain timing or amount. Investors seek transparent and comparable information about companies’ provisions for assessing future cash flows and financial positions. The IASB’s targeted improvements would help companies apply the requirements more consistently and provide investors with more useful information.
The proposed amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets would clarify how companies assess when to record provisions and how to measure them. The amendments would also require companies to provide more information about the measurement. The proposals would most likely be relevant for companies that have large long-term asset decommissioning obligations or are subject to levies and similar government-imposed charges.
This consultation is made up of three parts:
- Exposure Draft Provisions—Targeted Improvements—Proposed amendments to IAS 37
- Exposure Draft Provisions—Targeted Improvements—Proposed amendments to Guidance on implementing IAS 37 https://www.ifrs.org/content/dam/ifrs/project/provisions/2024-ed/iasb-ed-2024-8-ig-provisions-ti.pdf
- Exposure Draft Provisions—Targeted Improvements—Basis for Conclusions https://www.ifrs.org/content/dam/ifrs/project/provisions/2024-ed/iasb-ed-2024-8-bc-provisions-ti.pdf
Consultation is open until 12 March 2025.
Click here to download the 35-page Exposure Draft:
https://www.ifrs.org/content/dam/ifrs/project/provisions/2024-ed/iasb-ed-2024-8-provisions-ti.pdf
Relevance to Auditors, Independent Reviewers & Accountants:
- As an auditor and independent reviewer, you need to consider your clients’ compliance with accounting standards.
- As an accountant and compiler of financial statements, you need to consider amendments to standards that are issued by the standard-setting bodies, e.g. IASB, IAASB, etc.
Relevance to Your Clients:
- An entity compiling filing financials need to consider amendments to standards that are issued by the standard-setting bodies, e.g. IASB, IAASB, etc.