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IASB publishes proposed amendments to IAS 37 on onerous contracts

  • IASB document Image

Dec 13, 2018

The IASB has published an exposure draft, “Onerous Contracts — Cost of Fulfilling a Contract,” which would clarify IAS 37 by specifying which costs should be included in the assessment of whether a contract will be loss-making.

The proposed amendments would:

  • “[S]pecify that the costs of fulfilling a contract include both incremental costs, such as the costs of materials, and an allocation of other costs directly related to the contract, such as the depreciation charge for equipment the company uses to fulfil contracts.”
  • Give examples of costs that are — and are not — directly related to a contract providing goods or services.

Comments on the exposure draft are due by April 15, 2019. For more information, see the press release, exposure draft, and In Brief publication on the IASB’s Web site. 

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