The Board considered the proposed measurement requirements for liabilities within the scope of IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
The Board decided tentatively to make a limited exception to the proposed measurement requirements. The exception would be restricted to onerous contracts arising from transactions within the scope of IAS 18 Revenue and IFRS 4 Insurance Contracts. It would require entities to measure the onerous contract liability by reference to the expected costs of supplying the goods or services, rather than the amounts that the entity would pay a contractor to supply them on its behalf.
The purpose of the exception would be to postpone any change in practice for measuring those contracts, pending completion of the Board's revenue and insurance projects. When the Board issues its new revenue and insurance standards, it will either confirm the exception (possibly taking the contracts out of the scope of IAS 37) or delete it (bringing the measurement requirements for onerous sales and/or insurance contracts into line with the measurement of other liabilities in the scope of IAS 37).