This site uses cookies to provide you with a more responsive and personalised service. By using this site you agree to our use of cookies. Please read our cookie notice for more information on the cookies we use and how to delete or block them.
The full functionality of our site is not supported on your browser version, or you may have 'compatibility mode' selected. Please turn off compatibility mode, upgrade your browser to at least Internet Explorer 9, or try using another browser such as Google Chrome or Mozilla Firefox.

Amendments to IAS 37

Date recorded:

Comment Letter Analysis

The Board issued its Exposure Draft Amendments to IAS 37 Provisions, Contingent Liabilities and Contingent Assets and IAS 19 Employee Benefits (ED) on 30 June 2005. The comment period ended on 28 October 2005 and the Board received 123 comment letters.

During this session, the Board considered the main points raised in the comment letters and as a result, were asked to:

  1. affirm the project objectives
  2. approve the initial staff assessment of matters for which the staff:
    1. will undertake additional research and ask the Boards to reconsider, or
    2. expect to present to the Board for reaffirmation without additional research
  3. approve the staff's provisional project plan for the redeliberations.

The discussion began with an overarching discussion about general comments received in a number of the comment letters. The point was made that it appeared that the objectives and direction of the IAS 37 project had been misunderstood.

The Board reiterated its view that the amendments to IAS 37 did not amend the requirements of the current Standard or the current version of the Framework. Instead, the amendments were clarifications and a logical extension of the current IAS 37 Standard. The Board went on to point out that the comments received reflected an incorrect interpretation and application of IAS 37 as it currently stands. Board members acknowledged that the current Standard was a compromise pronouncement that did not properly articulate certain principles therefore it does not always read as it was intended. The Board views the amendments to IAS 37 as clarification of those ambiguities.

The Board pointed out that the amendments project should not be viewed as a convergence project between IAS 37 and FAS 5, because these two pronouncements are fundamentally different. Consequently, the Board decided that this project should be viewed on a standalone basis due to the high profile that it has taken on amongst constituents.

The Board affirmed its intention to continue with the project because it was clear that its reasoning in that project was starting to reap benefits in other projects as well - it has helped Board members to think about and understand other difficult issues. Consequently, the Board believes its decisions in this project reflect superior and principled thinking that is applicable to other projects. The Board suggested a communication strategy to help constituents understand this project (for instance, an article with the content presented to the World Standard Setters group).

The Board discussed briefly, how it intends to approach the roundtable discussions by making sure that there is wide geographical coverage.

With minor clarification, the Board approved the staff plan of issues to be reconsidered and those that do not require reconsideration (re-affirmation instead).

It was pointed out that the current project timetable runs until May 2007 and may change depending on progress.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.