IFRIC X Liabilities Arising from Participating in a Specific Market Waste Electrical and Electronic Equipment
The Board was asked to approve the Interpretation on this topic developed by the IFRIC. The Board discussed the appropriateness of issuing an interpretation on such a specific matter in a particular jurisdiction. It was noted that an interpretation on this matter is also being developed by the US. The Board agreed that the interpretation was necessary and an appropriate subject matter for an IFRIC interpretation.
The Board noted that the disclosure of possible future outflows which the IFRIC 'encouraged but did not require' in its basis for conclusions was inconsistent with IASB policy. Firstly, a disclosure requirement should either be contained in the authoritative pronouncement or it should be excluded, the basis for conclusions is an inappropriate place for it. Secondly, the Board has made a deliberate policy choice not to 'encourage' disclosure, and the Interpretation is inconsistent with that policy decision. Thirdly, the disclosure would be more onerous than those proposed in the proposed revisions to IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
The Board note that in the Basis for Conclusions the IFRIC noted that it did not address the accounting for 'new' waste management obligations because the IFRIC believe the accounting treatment is clear. The Basis for Conclusions went on to explain what that accounting treatment should be. The Board noted this was inappropriate use of the basis for conclusions. The Board agreed to endorse the issuance of the Interpretation providing that:
- The interpretation would be withdrawn and incorporated into the revised IAS 37 when that document is issued as a standard;
- The conclusion on 'new' waste management obligations in the Basis for Conclusions is moved to the 'Background' section of the Interpretation; and
- The 'encouraged' disclosure is removed.
The Board also agreed to recommend to the IFRIC that the transition paragraph be re-drafted to reflect that for many entities this will not be a change in accounting policy, rather it will be an election of an accounting policy for a previously un-accounted for transaction.