Provisions – Targeted Improvements

Timeline

On 12 November 2024 the International Accounting Standards Board (IASB) published the Exposure Draft IASB/ED/2024/8 Provisions - Targeted Improvements proposing amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets. Our response to the IASB was submitted on 12^th March 2025.

Background

The targeted improvements to IAS 37 aim to clarify:

when an entity recognises a provision - including whether and, if so, when an obligation conditional on an entity’s own future actions is a ‘present obligation’ and hence a liability;
whether the rate at which an entity discounts a provision for the time value of money should reflect the entity’s own credit risk, that is, the possibility that it may fail to fulfil its obligation; and
whether a provision for an obligation to deliver goods or services should comprise only the incremental costs of fulfilling the obligation or also include an allocation of other directly related costs.

UKEB Outreach

The UKEB outreach plan included discussions with stakeholders and public consultation on the UKEB’s Draft Comment Letter (DCL). Thank you to all stakeholders who participated in this project.

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UKEB Final Comment Letter

All stakeholder feedback received was considered when finalising the Comment Letter. The UKEB Final Comment Letter was submitted to the IASB on 12 March 2025. An accompanying Feedback Statement describes how feedback received from stakeholders was addressed.

The following relevant documents are available at the end of this page:

Draft Comment Letter and Invitation to Comment
Response from stakeholders
Final Comment Letter
Feedback Statement
Due Process Compliance Statement

Next steps

The IASB is expected to review stakeholder feedback received on the Exposure Draft in Q2 2025.

UKEB Meetings

Meetings related to the project are as follows:

May 2023 IASB General Update: Appendix 6A
June 2023 Provisions – Targeted Improvements
May 2024 IASB General Update: Appendix E
June 2024 IASB General Update: Appendix A
July 2024 IASB General Update: Appendix A
October 2024 Project Initiation Plan (Agenda paper 6)
November 2024 Initial Board technical discussion (Agenda paper 6)
December 2024 Provisions – Initial technical analysis and Draft Comment Letter (Agenda paper 6)
January 2025 Provisions – Technical analysis (Agenda paper 6)
February 2025 Final Comment Letter, Feedback Statement and [Draft] Due Process Compliance Statement (Agenda Paper 6)
March 2025 Due Process Compliance Statement – for noting (Agenda Paper 12B)