The ASBJ disagrees with removing the probability criterion and requiring the measurement using the expected value, and also calls to modify the measurement objective set out in the Exposure Drafts overall requirements.
ASBJ believes that the probability criterion in recognition of liabilities should be retained and measurement using the most likely outcome may be more appropriate for some obligations.
With regard to the initial measurement objective, ASBJ argues that in order to provide information useful for predicting future cash flows, a liability within the scope of the ED should be measured at an estimated present value of the outflow required to ultimately settle the obligation.
ASBJ therefore suggests that paragraph 36A of the overall requirements should be modified to delete the phrase ‘at the end of the reporting period’ and replaced by ‘the resources required to fulfil the obligation’ in paragraph 36B as the costs rather than the value.
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