The Board continued its discussions on the project to amend IAS 37 Provisions, Contingent Liabilities and Contingent Assets and considered:
- litigation liabilities
- reimbursement rights
- disclosure of possible obligations
- stand-ready obligations
The Board considered concerns that defendants in legal proceedings might encounter practical problems applying the proposed recognition and measurement requirements and decided tentatively:
- not to make any changes to the proposals.
- not to amend or supplement the proposed guidance on identifying liabilities that cannot be measured reliably.
- that the proposals require no modification in this project for application in the US legal environment. The Board noted that the proposed changes to IAS 37 do not introduce any new factors that would cause problems in that environment.
The Board discussed the measurement of reimbursement rights and decided tentatively:
- to remove the �asset cap� from IAS 37. The �asset cap� limits the amount recognised for a reimbursement right to the amount recognised for the related liability.
- not to specify a measurement objective for reimbursement rights.
- that the standard should state explicitly that the assumptions used to measure a reimbursement right should be consistent with those used to measure the related liability.
Disclosure of possible obligations
The Board discussed what an entity should disclose when it is uncertain whether it has a present obligation, but has judged that it does not. The Board decided tentatively:
- to help preparers identify when disclosure is required, by cross-referring from the disclosure requirement back to the discussion of uncertainty in the recognition section of the standard, and giving examples of situations involving uncertainty.
- that an entity should disclose the following, unless the possibility of any outflow of economic benefits in settlement is remote:
(a) a description of the circumstances;
(b) an indication of the financial effects;
(c) an indication of uncertainties relating to the amounts or timing of any outflow of economic benefits; and
(d) the possibility of any reimbursement.
The Board tentatively approved an analysis of the attributes of stand-ready obligations and the circumstances in which such obligations arise. This analysis refined an earlier analysis that the Board had considered in October 2007.
The Board has now completed its discussions of comments on the exposure draft. At the next meeting it will consider whether any of the changes it has decided tentatively to make require re-exposure.