Regulatory updates

EDs/Consultation papers – India and International

Updates from IASB

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The IASB has proposed the following key changes to IAS 37:

When should an entity recognize provisions

  • The IASB has proposed three new tests to determine whether a present obligation exists, and
  • IASB has proposed specific guidance for threshold based obligations (this could result in the withdrawal of IFRIC 21, Levies)

Under the proposals, companies may need to start recognising some provisions sooner if they expect to exceed a specific threshold. This would require management to make new judgements.

Which costs should be included in measuring provisions The IASB proposes to include all direct costs in measuring any type of provision. This may result in some provisions becoming larger.

Which discount rate should be used to discount a long-term provision The IASB proposes to use a risk-free discount rate in measuring a long-term provision. Depending on the company’s current accounting policy, some provisions may become larger.

The consultation is open for comments until 12 March 2025.

To access the text please click here

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