Some companies have paid tariffs on US imports and may now be entitled to a refund. However, there is uncertainty over whether and when refunds would be received.
The situation continues to evolve. Judgement is required to determine whether it is virtually certain at the reporting date that a refund will be received and can be recognised. Clear and transparent disclosures about potential future refunds are critical to providing users of financial statements with relevant information.
In 2025, tariffs were introduced on some goods imported into the US under the International Emergency Economic Powers Act (IEEPA). These tariffs were subsequently challenged, with the US Supreme Court ruling in February 2026 that IEEPA does not authorise the US President to impose tariffs. However, the Supreme Court did not address refunds. In March 2026, the US Court of International Trade (CIT) ordered the US government1 to refund all tariffs imposed under IEEPA. The government is working on a refund mechanism but has not waived its right to appeal the CIT order to limit the scope of refunds.
To determine whether and when to recognise a refund, a company applies the contingent assets2 guidance in IAS 37 Provisions, Contingent Liabilities and Contingent Assets. An asset is only recognised if it is ‘virtually certain’ that a refund will be received.
A company performs an assessment of tariff refunds to be received separately from an assessment of any outstanding liabilities for tariffs unpaid at the date of the Supreme Court decision.
There is significant uncertainty related to tariff refunds, and circumstances may change rapidly. A company needs to consider all relevant uncertainties that exist at the reporting date and determine the likelihood of receiving a refund. If a company made multiple tariff payments, then it may need to perform this assessment separately for different populations of tariffs paid – e.g. unliquidated vs liquidated tariff entries.
When it becomes virtually certain that a refund will be received, a company recognises the asset and related income in that period.
The following questions will help you identify and assess uncertainties relevant to your company.
In times of uncertainty, investors and regulators look for clarity in companies’ financial reports, including about refunds for tariffs. They want to understand how a company is affected, the uncertainties it faces, the judgements, estimates and assumptions management makes, and how these are reflected in the financial statements.
There is a specific requirement in IAS 37 to disclose information about a contingent asset if a related inflow of economic benefits is probable. Also, the IFRS® accounting standard related to presentation includes overarching requirements to provide additional information if it is relevant to users of the financial statements.
The appropriate level of disclosure about uncertainty over tariff refunds will depend on the company’s circumstances.
A company needs to consider other potential impacts on financial reporting, including the following.
1 In this article, the ‘government’ refers to the US Administration.
2 A contingent asset is a possible asset that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the company.
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