4. April 2019
Therein we welcome the IASB’s efforts to clarify the requirements in IAS 37 Provisions, Contingent Liabilities and Contingent Assets and agree that the proposed clarification forms the basis for a common understanding of the term “cost of fulfilling a contract”. Also, we agree that the directly related cost approach is preferable and provides a more faithful representation of the cost of fulfilling a contract than the incremental cost approach.
However, we encourage the IASB to further clarify the term “costs that relate directly to the contract” by modifying and complementing the examples proposed as well as the Basis for Conclusions.