The Institute of International Finance (IIF) provided feedback on March 12 to the International Accounting Standards Board (IASB) Exposure Draft on “Provisions—Targeted Improvements: Proposed amendments to IAS 37.”

The IIF appreciates the IASB's objective to improve the requirements for recognizing and measuring provisions and we are generally supportive of the proposals in the Exposure Draft (ED) to align the definition of a liability in IAS 37 with the Conceptual Framework for Financial Reporting.

In the letter, we highlighted certain areas where we believe there is a lack of clarity regarding the application of the present obligation proposals. Additionally, we are concerned about the potentially significant implications to preparers of financial statements resulting from the proposed amendments related to allocations of expenditures, transition provisions and the climate-related example included in the implementation guidance. These concerns and associated recommendations can be found in more detail in the IIF response letter.