IASB ED/2018/2

  • For-profit

Tier 1 and Tier 2

Onerous Contracts – Cost of Fulfilling a Contract

(Proposed amendments to IAS 37)

The International Accounting Standards Board (IASB) has published for comment an Exposure Draft, Onerous Contracts – Cost of Fulfilling a Contract (Proposed amendments to IAS 37) (the ED).

The ED proposes to amend IAS 37 Provisions, Contingent Liabilities and Contingent Assets to specify the costs an entity includes in determining the “cost of fulfilling” a contract, for the purpose of assessing whether a contract is onerous.

Under IAS 37, an entity determines that a contract is onerous if the costs the entity expects to incur to fulfil the contract are higher than the economic benefits it expects to receive from it. However, IAS 37 does not specify which costs to include in determining the cost of fulfilling a contract.

The proposed amendments specify that the costs of fulfilling a contract include both incremental costs and an allocation of other costs directly related to the contract.

The New Zealand Accounting Standards Board (NZASB) encourages you to read the ED and to share any comments you may have on the proposed amendments.


Accessing the Consultation Documents

Commenting on the Proposal

Submissions to the NZASB closed on 27 February 2019, but you can still comment directly to the IASB, by 15 April 2019, with a copy to the NZASB. 

You can either email your comments to the IASB  or upload them using the Open for comment page.

Submissions closed on 29 March 2019