BDO submits comment letter on IASB ED Provisions – Targeted Improvements
BDO submits comment letter on IASB ED Provisions – Targeted Improvements
BDO has submitted its comment letter to the International Accounting Standards Board (IASB) on Exposure Draft 2024/8 Provisions Targeted Improvements (Proposed amendments to IAS 37).
BDO supports the objective of the IASB to clarify the application of IAS 37 Provisions, Contingent Liabilities and Contingent Assets. While BDO does not object to the outcomes produced by applying the revised recognition criteria proposed in the Exposure Draft, BDO has expressed concerns about the following:
BDO also suggests that the IASB perform additional field testing on the proposed recognition requirements to various fact patterns before the proposed amendments are finalised. BDO generally agrees with the proposed requirements relating to the measurement of expenditures required to settle an obligation, the determination of the discount rate and transition requirements.
The comment letter may be accessed here.
BDO supports the objective of the IASB to clarify the application of IAS 37 Provisions, Contingent Liabilities and Contingent Assets. While BDO does not object to the outcomes produced by applying the revised recognition criteria proposed in the Exposure Draft, BDO has expressed concerns about the following:
- The high level of complexity required to interpret and apply the recognition criteria for provisions; and
- The potential for inconsistent application to different types of levies and unintended consequences as a result of the complexity of the proposals in comparison to consistent application that has been achieved applying IFRIC 21 Levies.
BDO also suggests that the IASB perform additional field testing on the proposed recognition requirements to various fact patterns before the proposed amendments are finalised. BDO generally agrees with the proposed requirements relating to the measurement of expenditures required to settle an obligation, the determination of the discount rate and transition requirements.
The comment letter may be accessed here.