Last updated: 16 Dec 2024 02:00 Posted in:
The International Accounting Standards Board (IASB) has said it wants to improve the requirements for recognising and measuring provisions on company balance sheets.
The IASB said investors are seeking 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 amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets would clarify how companies assess when to record provisions and how to measure them. They would 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.
IASB chair Andreas Barckow said: “Our proposals clarify the accounting requirements for provisions, helping companies provide better information to investors.”
The IASB is inviting feedback on these amendments. The comment period is open until 12 March 2025.