Changing the way you learn

Provisions & Contingencies

Standard
1. IAS 37
Definitions
1. Provision
  1. Liability - uncertain timing / amount
    1. Liability
      1. Present obligation - past events - settlement - outflow of resources - embodying economic benefits
Recognition Criteria
1. Present obligation
  1. Past events
    1. Probable outflow
      1. Reliable estimate
    2. Obligating event
      1. Legal obligation
      2. Constructive obligation
Contingents
1. Liabilities
  1. Possible obligation - past events - existence will be confirmed - occurrence / non - occurrence - one / more uncertain future events not wholly within the control of the entity
2. Assets
  1. Possible asset - past events - existence will be confirmed - occurrence / non-occurrence - one / more uncertain future events not wholly within the control of the entity
Measurements
1. Best estimate
2. Risks & Uncertainties
3. Present value
4. Future events
5. Expected disposal of assets
Reimbursements
1. virtually certain
2. separate asset
3. Reimbursement ≤ Provision
4. presented in P&L
Changes in provisions
1. Reviewed and adjusted
2. Reversed
3. Discounted
Application of Recognition & Measurement Rules
1. Future operating losses
2. Onerous contracts
3. Restructuring
Disclosure

Provisions & Contingencies

	Created by Thiffany Martin almost 10 years ago