24/06/2020 - EFRAG requests comments on its Draft Endorsement Advice on Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37)
EFRAG is consulting on its
assessment of Onerous Contracts -
Cost of Fulfilling a Contract (Amendments to IAS 37) against the technical criteria in the EU and on its assessment of whether the Amendments are conducive to the European public good. Comments are requested by 7 September 2020.
EFRAG has issued its Draft Endorsement Advice letter and a separate invitation to comment relating to the endorsement for use in the EU of Onerous Contracts - Cost of Fulfilling a Contract (Amendments to IAS 37) ('the Amendments').
The objective of the Amendments is to clarify the requirements of IAS 37 on onerous contracts regarding the assessment of whether, in a contract, the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.
The Amendments become effective for annual periods beginning on or after 1 January 2022, with earlier application permitted.
EFRAG's overall preliminary assessment is that the Amendments satisfy the criteria for endorsement for use in the EU and therefore recommends its endorsement.
EFRAG is seeking comments on all aspects of its analyses supporting its preliminary conclusions.
Comments are requested by 7 September 2020. You can comment on EFRAG’s Draft Endorsement Advice by clicking on the ‘Comment publication’ link below.
EFRAG has also updated its Endorsement Status Report, which can be downloaded here on EFRAG's web page.