On 30 June 2005, the IASB proposed to amend IAS 37 (and to retitle it Non-financial Liabilities
) and complementary limited amendments to IAS 19 Employee Benefits
. The amendments to IAS 37 would change the conceptual approach to recognising non-financial liabilities by requiring recognition of all obligations that meet the definition of a liability in the IASB's Framework
, unless they cannot be measured reliably. Uncertainty about the amount or timing of settlement would be reflected in measuring the liability instead of (as is currently required) affecting whether it is recognised. Our response states:
With the exception of the proposals for restructuring provisions, we do not support the ED, which we see as largely unnecessary. In our view, the majority of the Board's proposals are premature and pre-judge matters that should be discussed in the context of the review of the IASB Framework rather than as an amendment of IAS 37. We think that IAS 37 is operating satisfactorily within the current operating model and environment. In addition, we do not think that the Board's choice of a single measurement attribute is appropriate. As such, we find the majority of the changes proposed in the ED fail to achieve an improvement in financial reporting.