In 2005, the IASB published an exposure draft of a standard to replace IAS 37 provisions, contingent liabilities and contingent assets. The board has reached decisions on most of the principles to be included in the new standard.  However, in response to comments, the board has also developed more guidance on the measurement requirements. The new IFRS will apply to liabilities such as:

- liabilities arising from legal disputes

- statutory asset decommissioning obligations

- other environmental obligations

- liabilities arising under contracts that have become onerous.

It will not apply to items such as financial, pension, income tax and insurance liabilities, because they are within the scope of other standards. The exposure draft proposes that the measurement should be the amount that the entity would rationally pay at the measurement date to be relieved of the liability. Normally, this amount would be an estimate of the present value of the resources required to fulfil the liability.

The estimate would take into account the expected outflows of resources, the time value of money and the risk that the actual outflows might ultimately differ from the expected ones.  The Exposure Draft is open for comment until 19 May 2010 and the IASB expects to issue the new IFRS by the end of 2010.