Specific issues that were brought to the attention of the IASB by many different letter writers included a lack of clarity in the ultimate specific purpose of the proposed amendments, remaining confusion regarding the definition of specific terms and the recording of very specific classes and sets of obligations and situations, and the fact that present-day valuations for many obligations and liabilities that fall under IAS 37 were probably entirely inaccurate, as these liabilities would be discharged when they became due (IASB 2010). In general, these issues were more specific than those cited with Exposure Draft #1. Given the specific issues that were raised in the comment letters to Exposure Draft #2 as well as the trend that exists in a comparison of the comment letters moving from Exposure Draft #1 to Draft #2, the adjustment that will likely be made in Exposure Draft #3 are fairly easy to predict. There will need to be a greater clarification and definition of language, especially with terms such as "settle" that do not necessarily refer to any specific action or set of actions, and the various classes of obligations and liabilities that have received proposed changes in the amendments will also need to be more concretely defined. It is also expected that certain major changes in accounting and reporting methods, such as the current valuation of future liabilities, will either be eliminated or will be mitigated by some sort of special measure that reflects the changing valuation of the given liability or obligation. This will put the amendments more in keeping with the international community's desires.

Personal Comment and Reflection

Despite their lack of clarity and the existence of a few redundancies and other issues, the proposed amendments definitely bring a positive change to the existing standards. The valuation of non-financial future...

The specific methods of valuation proposed in the initial amendment and even in Exposure Draft #2 raised obvious concerns among accountants and related officials and professionals in the international community, but the attempt to value these liabilities is definitely worthwhile.
Due to the degree to which large portions of the proposed amendments have been accepted by accountants on an international basis and the avid interest in commenting on specific features of the amendment rather than rejecting the proposed changes wholesale, it seems quite likely that these amendments will be adopted in some form at some point in the relatively near future. There is no doubt that accounting for the types of liabilities and obligations that fall under IAS 37 is necessary in reporting an accurate picture of a company's balance sheets, and IAS 37 as it now stands does not do an adequate job of this; these amendments will be adopted because they are a necessary part of improving accounting standards. As to when this adoption will actually take place, it is probably at least a year out; allowing for the drafting of another exposure draft, another round of comment and adjustment, and finally the drafting and adopting of the amendments in their final form.

The goal of the IASB is to provide a standardized system of accounting and reporting so that businesses can actually be analyzed and compared in a meaningful way. Without making certain changes to IAS 37 and the manner in which certain non-financial liabilities and obligations are met, this goal will remain elusive at least to a small degree. All aspects of a business that have an ultimate financial impact must be included in the accounting reports and balance sheets of…