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Description :
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In June 2005 the IASB published an Exposure Draft on Amendments to IAS 37 - Provisions, and IAS 19 - Employee Benefits. The project started following the decisions taken in IFRS 3 - Business Combinations about recognition of the contingencies of the acquiree. For more information on the 2005 ED click here
In January 2010 the IASB issued a limited re-exposure of proposed amendments to IAS 37. The ED is meant to clarify the measurement objective for liabilities in scope of IAS 37 and add detailed guidance on measurement.
The IASB proposes that liabilities in scope of IAS 37 are measured at the amount that an entity would rationally pay at the end of the reporting period to be relived of the obligation.
Normally this amount would be the present value of the resources required to fulfil the obligation. The IASB proposes that an entity estimates the expected value of the resources, that is the probability-weighted average of the possible outcomes.
When the obligation is to undertake a service, the entity should consider the price that a contractor would charge to undertake the service at the entity's behalf. If there is no market for the service, an entity estimates the price that it would charge to another entity to perform the service, inclusive of a profit margin.
The measurement of the liability should take into account the time value of money and the risk that the actual outflows might ultimately differ from those expected.
For additional information, please consult the IASB project page.
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Working groups :
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EFRAG Technical Expert Group (EFRAG TEG) -
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Current Project Status :
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Final Comment Letter
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Efrag Output
Comment Letters
No 'Comment Letters'
Other Input
No 'Other Input'
News Items
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