Provisions & Contingencies

Provisions & Contingencies

1. Standard

   • IAS 37

2. Definitions

   • Provision
     • Liability - uncertain timing / amount
       • Liability
         • Present obligation - past events - settlement - outflow of resources - embodying economic benefits

3. Recognition Criteria

   • Present obligation
     • Past events
       • Probable outflow
         • Reliable estimate
       • Obligating event
         • Legal obligation
         • Constructive obligation

4. Contingents

   • Liabilities
     • Possible obligation - past events - existence will be confirmed - occurrence / non - occurrence - one / more uncertain future events not wholly within the control of the entity
   • Assets
     • Possible asset - past events - existence will be confirmed - occurrence / non-occurrence - one / more uncertain future events not wholly within the control of the entity

5. Measurements

   • Best estimate
   • Risks & Uncertainties
   • Present value
   • Future events
   • Expected disposal of assets

6. Reimbursements

   • virtually certain
   • separate asset
   • Reimbursement ≤ Provision
   • presented in P&L

7. Changes in provisions

   • Reviewed and adjusted
   • Reversed
   • Discounted

8. Application of Recognition & Measurement Rules

   • Future operating losses
   • Onerous contracts
   • Restructuring

9. Disclosure