Climate-related Commitments (IAS 37)

The Committee received a request asking it to clarify:

1. whether an entity's commitment to reduce or offset its greenhouse gas emissions creates a constructive obligation for the entity;
2. whether a constructive obligation created by such a commitment meets the criteria in IAS 37 Provisions, Contingent Liabilities and Contingent Assets for recognising a provision; and
3. if a provision is recognised, whether the corresponding amount is recognised as an expense or as an asset when the provision is recognised.