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IAS 37 — Deposits on returnable containers

Date recorded:

In some industries, eg brewers, heating gas, entities distribute their products in returnable containers. These entities often collect a deposit for each container delivered and have an obligation to refund this deposit when containers are returned by the customer. The issue is how the entity's obligation to refund the deposit for returned containers should be accounted for.

During the discussion it emerged that different scenarios could be subsumed under amounts that are repayable on the return of an item. To avoid providing application guidance on IAS 18 Revenue the IFRIC agreed on the staff recommendation (i.e. apply IAS 37 Provisions, Contingent Liabilities and Contingent Assets instead of IAS 39 Financial Instruments: Recognition and Measurement), but asked the staff to delete paragraph three of the proposed wording for rejection except for the second part of the last sentence.

Correction list for hyphenation

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