Provisions—Targeted Improvements

The IASB met on 24 February 2026 to redeliberate proposals in the Exposure Draft Provisions—Targeted Improvements relating to one of the criteria for recognising a provision: the present obligation recognition criterion. That criterion requires an entity to have a present obligation as a result of a past event.

The IASB discussed two of the three conditions proposed for inclusion within the present obligation recognition criterion:

1. the ‘past-event’ condition, and specifically, proposed requirements for applying that condition to levies (Agenda Papers 22A–22B); and
2. the ‘transfer’ condition, which would require that ‘the nature of the entity’s obligation is to transfer an economic resource’ (Agenda Paper 22C).

Levies—Application requirements (Agenda Paper 22A)

The IASB tentatively decided to supplement the ‘past-event’ condition proposed in the Exposure Draft with application requirements for levies. Those application requirements would:

1. specify a principle—namely, that the economic benefit or action that meets the past-event condition for a levy is the economic benefit or activity the government is seeking to levy; and
2. support this principle with a constraining presumption—namely, that the economic benefit or activity the government is seeking to levy will be one of those required by the levy legislation for the levy to be payable.

All 13 IASB members agreed with this decision.

Levies—Rebuttable or non-rebuttable presumption? (Agenda Paper 22B)

The IASB discussed whether the constraining presumption should be rebuttable in some circumstances.

The IASB was not asked to make any decisions.

Recognition—Transfer condition (Agenda Paper 22C)

The IASB tentatively decided:

1. to retain the proposal to add an explicit transfer condition to the present obligation recognition criterion in IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
2. to explain more fully the difference between an obligation to transfer an economic resource and an obligation to exchange economic resources, by clarifying that:
   1. an obligation to exchange economic resources with another party combines an obligation to transfer an economic resource to that party with a right to receive another economic resource from that party.
   2. the economic resource an entity receives could be one it will recognise as an asset (for example, goods) or an expense (for example, a service).
   3. an entity has an obligation to exchange economic resources with another party only if transferring one economic resource to that party gives the entity a right to receive another economic resource from that party. It is not sufficient that transferring the economic resource to the other party could give rise to other forms of economic benefit for the entity.
3. to expand examples in the Guidance on implementing IAS 37 to clarify:
   1. why asset decommissioning and environmental rehabilitation obligations meet the transfer condition; and
   2. how the transfer condition relates to the measurement requirements in IAS 37.
4. to clarify the implications of the transfer condition for levies by:
   1. defining the term ‘levy’ to include only non-reciprocal charges; and
   2. stating within the application requirements for levies that an obligation for a levy will, by definition, meet the transfer condition.

All 13 IASB members agreed with these decisions.