EFRAG draft comment letter on proposed amendments to IAS 37 regarding onerous contracts
25 Jan, 2019
The European Financial Reporting Advisory Group (EFRAG) has issued a draft comment letter on the IASB exposure draft ED/2018/2 'Cost of Fulfilling a Contract (Proposed amendments to IAS 37)'.
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.
Comments on EFRAG's draft comment letter are requested by 5 April 2019. For more information, see the press release and the draft comment letter on the EFRAG website.
