EFRAG has published its draft comment letter in response to the IASB's ED 2018/2 Onerous Contracts - Cost of Fulfilling a Contract - Proposed amendments to IAS 37 and seeks constituents' views on the proposals.
On 25 January 2019, EFRAG published its draft comment letter on the ED. In the draft comment letter, EFRAG welcomes the IASB’s efforts to clarify the requirements in IAS 37 regarding the assessment of whether, in a contract, the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it.
However, EFRAG notes that the proposed amendments would affect the onerous assessment not only for long-term construction contracts previously in the scope of IAS 11 but for all contracts in the scope of IAS 37. Consequently, EFRAG encourages the IASB to further assess the expected impact of the proposals. EFRAG also requests constituents to explain what is their perceived impact of the proposals that should be considered by the IASB when finalising the amendments.
Comments on EFRAG's draft comment letter should be submitted by 5 April 2019.
Full press release
© EFRAG - European Financial Reporting Advisory Group
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