EFRAG has published its Draft Comment Letter (DCL) on the IASB’s Exposure Draft IASB/ED/2024/8 on Provisions—Targeted Improvements (proposed amendments to IAS 37). The consultation period for the DCL is open until 25 February 2025. EFRAG’s DCL outlines its preliminary views on the proposed amendments and asks constituents to provide feedback on key aspects before finalizing the letter to the IASB.
EFRAG’s Views
- EFRAG finds the proposals to clarify when an entity has a present obligation from a past event generally useful. However, it recognizes differing views on whether certain provisions should be recognized earlier than under current requirements.
- EFRAG supports specifying that the costs to settle a present obligation should only include costs directly related to that obligation.
- EFRAG broadly supports the proposal to use a risk-free rate for discounting future expenditure, excluding non-performance risk, which aims to reduce diversity in practice.
- EFRAG has made additional suggestions for improving the clarity of the proposals and has provided comments on:
- Transition requirements
- Disclosures for subsidiaries without public accountability
- Proposed changes to the implementation guidance of IAS 37
For more information [here]
To submit your comment letters [here]