The EACB welcomes the IASB’s efforts to align the definition of a liability in IAS 37 with the Conceptual Framework and to address concerns arising from IFRIC 21 regarding the recognition of levies and their economic substance. However, EACB cautions that the proposed amendments may not improve the meaningfulness of reported information and could lead to earlier recognition of expenses without reflecting their true economic substance.
In particular, EACB highlights the practical challenges in applying the proposed criteria for recognising provisions for recurring bank levies, such as contributions to the Single Resolution Fund. The EACB calls on the IASB to clarify the notion of “entity’s actions” and to distinguish more clearly between recognition criteria and measurement bases. EACB also recommends conducting field testing on existing levy cases to ensure that the amendments achieve their intended purpose and enhance the consistency and usefulness of financial reporting.