EFRAG BusinessEurope - joint online outreach event - Variable consideration – Alternatives to address current accounting challenges

​In September 2022, EFRAG published a Discussion Paper Accounting for variable consideration – from a purchaser’s perspective. There is currently diversity in practice when it comes to how a purchaser entity accounts for variable consideration. The Discussion Paper examines different possible alternatives for requirements to align reporting practice. The two main issues considered, which have also been brought before the IFRS Interpretations Committee in the past and affirmed as accounting challenges with diversity in practice during EFRAG’s outreach to stakeholders, are: 

• When should a purchaser recognise a financial liability for variable consideration that depends on the purchaser’s future actions (e.g., if variable payments to be made by the purchaser of an asset depend on exceeding sales or any other set performance target)?
• Whether/when should subsequent changes in estimates of variable consideration be reflected in the measurement (i.e., at cost) of the asset acquired by the purchaser?

Following a presentation of EFRAG’s Discussion Paper, a panel, consisting of different stakeholders, will provide perspectives on practical challenges and views on possible approaches for accounting for variable consideration. The panel discussion of the aforementioned two main issues will be divided into separate sessions which include audience Q&A and polling questions. Confirmed speakers for the event include:

Session moderators

• Michael Fechner, EFRAG FRB member and Manager at Mercedes-Benz Group AG’s Accounting Department 
• Claes Norberg, Chair BusinessEurope Sounding Board and EFRAG Administrative Board member, Director of Accountancy at the Confederation of Swedish Enterprise 

Panellists

• Gary Berchowitz, Partner PwC’s Global Corporate Reporting Department
• Patrina Buchanan, IASB member
• Malgorzata Matusewicz, EFRAG FR TEG member and Partner at EY
• Araceli Mora, EFRAG Academic Panel member, Professor in Accounting and Finance at the University of Valencia
• Financial statement preparer (TBD)

Opening and closing remarks

• Chiara Del Prete, EFRAG FR TEG Chair and Acting EFRAG SR TEG Chair 
• Saskia Slomp, EFRAG CEO

Download the ‘Save the date’ here and register now now for the joint online outreach event.