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December 2024

Financial Reporting Dossier

By Pankaj Tiwari, Chartered Accountant
Reading Time 20 mins

A. KEY GLOBAL UPDATES

1. IASB: Improvements to Requirements for Provisions

On 12th November, 2024, the International Accounting Standards Board (IASB) has published consultation for improving the requirements for recognising and measuring provisions on company balance sheets.

The proposed amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets would clarify how companies assess when to record provisions and how to measure them. 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.

The proposed amendment is to improve the following areas:

Areas of IAS 37 Proposed amendment
(a)  one of the criteria for recognising a provision— the requirement for the entity to have a present obligation as a result of a past event (the present obligation recognition criterion);   (a)  change the timing of recognition of some provisions. The amendments would affect provisions for costs, often levies, that are payable only if an e
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