Feedback statement on Accounting for Variable Consideration—From a purchaser’s perspective

EFRAG has now issued its Feedback Statement, summarising the main comments EFRAG received on its Discussion Paper Accounting for Variable
Consideration—From a purchaser’s perspective.

In September 2022, EFRAG published the Discussion Paper (DP) Accounting for Variable Consideration—From a purchaser's perspective. The DP assessed different approaches for:

  • When to recognise a liability for variable consideration that depends on the purchaser's future actions, and
  • Whether, and if so when, subsequent changes in (the estimate of) variable consideration should be reflected in the cost of the acquired asset.

Currently, diversity in practice exists on these two issues when entities account for variable consideration.

The DP also discussed whether the issues should be addressed by developing a unified set of principles on how to account for variable consideration or should be considered on a standard-by-standard level.

EFRAG has now issued its Feedback Statement summarising the main comments received in response to the DP.

The feedback EFRAG received confirmed the current diversity in practice on the issues considered in the DP and standard-setting activities would be needed to address these issues. A key issue that should be considered is what 'measurement at cost' means. This could be addressed by the IASB's project on intangible assets.

The Feedback Statement is available here.

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