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SBR - Chapter 5
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- 1provision:A provision: a liability of uncertain timing or amount.
- 2provision: Rules(a) An entity has a present obligation (legal or constructive) as a result of a past event;
(b) It is probable that an outflow of resources embodying economic benefits will be
required to settle the obligation; and
(c) A reliable estimate can be made of the amount of the obligation - 3Allowing for uncertainties(a) Where the provision being measured involves a large population of items
use expected values.
(b) Where a single obligation is being measured
The individual most likely outcome may be the best estimate. - 4Future operating lossesProvisions are not recognised for future operating losses. They do not meet the definition of a
liability and the general recognition criteria set out in the standard (IAS 37: para. 63).
IAS 37 defines an onerous contract as one in which unavoidable costs of completing the contract exceed the benefits expected to be received under it (IAS 37: para. 10). - 5Unavoidable costs of meeting an obligation are the lower of: of fulfilling the contract
Penalties from failure to fulfil the contract - 6Restructuringis a programme that is planned and is controlled by management and materially changes either the scope of a business undertaken by an entity, or the manner in which that business is conducted (IAS 37: para. 10).
- 7main purposes of IAS 37One of the main purposes of IAS 37 was to target abuses of provisions for restructuring by introducing strict criteria about when such a provision can be made.
- 8RecognitionA provision for restructuring is recognised only when the entity has a constructive obligation to restructure. Such an obligation only arises where an entity:
- 9Restructuring costsA restructuring provision includes only the direct expenditures arising from the restructuring, which are those that are both (IAS 37: para. 80):
(a) Necessarily entailed by the restructuring; and
(b) Not associated with the ongoing activities of the entity. - 10Contingent liability (IAS 37)(a) A possible obligation arising from past events whose existence will be confirmed only by
the occurrence of one or more uncertain future events not wholly within the control of the
entity; or - 11ORA present obligation that arises from past events but is not recognised
- 12RecognitionContingent liabilities should not be recognised in financial statements, but should be disclosedunless the possibility of an outflow of economic benefits is remote (IAS 37: paras. 27–28)
- 13Contingent asset (IAS 37):): a possible asset that arises from past events and whose existence will be confirmed by the occurrence of one or more uncertain future events not wholly within the entity's control
- 14Events after the reporting period are those events,both favourable and unfavourable, that occur between the year end and the date on which the financial statements are authorised for issue (IAS 10: para. 3). Two types of events can be identified (IAS 10: para. 3):
- 15Adjusting eventsProvide evidence of conditions that existed at the end of the reporting period
Financial statements should be adjusted - 16Non-adjusting eventsIndicative of conditions that arose after the end of the reporting period
Not adjusted for in financial statements, but are disclosed - 17Disclosure(a) An entity discloses the date when the financial statements were authorised for issue and who gave the authorisation (IAS 10: para 17).
- 18If non-adjusting events after the reporting period are materialnon-disclosure could influence the decisions of users taken on the basis of the financial statements. Accordingly, the following is disclosed for each material category of non-adjusting event after the reporting period:
- 19The nature of the event; andAn estimate of its financial effect, or statement that such an estimate cannot be made. (IAS 10: para 21)
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- Fichas sobre SBR - Chapter 5, creado por D A el 02/12/2020.
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