LKAS 37 Provisions,Contingent Liabilities and Contingent assets

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Mind Map on LKAS 37 Provisions,Contingent Liabilities and Contingent assets, created by gunawardhanadars on 02/06/2014.
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Mind Map by gunawardhanadars, updated more than 1 year ago
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Resource summary

LKAS 37 Provisions,Contingent Liabilities and Contingent assets
  1. Appropriate measurement and recognition criteria

    Annotations:

    • Provisions,Contingent liabilities and Contingent Assets
    • The sufficient information is disclosed in the notes to enable the    nature                                                   Timing                                                Amount
    • This standard is not apply,                          Financial instruments               Executory Contracts               Insuarance policies
    1. Provision - a liability of uncertain timing or amount

      Annotations:

      • Liability is a present obligation of the enterprise arising from the past events, the settlement of which is expected to result in an outflow from the enterpise of resources embodying economic benefits
      • Provisions can be distinguished from other liabilities , Uncertainity about the timing or amount of the future expenditure required in settlement  
      1. Recognition
        1. Present obligation

          Annotations:

          • An enterpise has a present obligation (legal /constructive) as a result of past event
          • taking all the available evidence in to account , it is more likely than not that a present obligation exists at the balance sheet date
          1. Legal obligation

            Annotations:

            • A contract Legislation Other operation of law
            1. warranties
              1. Single guarantee
              2. Constructive obligation

                Annotations:

                • That derives from enterprises actions where, established pattern of past practice,published policies, sufficient specific current statement, the enterprise indicated to other parties that it will accept certain responsibilities
                • as a result the enterprise has created a valid expectations on the other parties
                1. Refunds policy
              3. Probable settlement

                Annotations:

                • It's probable an outflow of resources embodying economic benefits will be required to settle the obligation 
                1. Reliable estimate

                  Annotations:

                  • how much can be made of the amount of the obligation
              4. Application of the recognition and measurement rules
                1. Future operating losses
                  1. Not a provision
                  2. Onerous contract
                    1. A provision
                  3. Changes in provision
                    1. Current best estimate
                    2. Use of provisions
                      1. Originally recognized expenditure
                      2. Reimbursement of the provision
                        1. Separate asset
                          1. Income statement
                            1. net amount
                        2. Restructuring
                          1. Scope
                            1. Manner
                              1. Direct expenditure arising from the restructuring
                                1. Necessarily entailed by the restrucuring
                                  1. Not associated with ongoing activities
                                2. Contingent liability
                                  1. Possible obligation
                                    1. Existance will be confirmed
                                      1. Occurance or non occurence one or more future events
                                    2. Disclose
                                    3. Contingent asset
                                      1. Possible asset
                                        1. Disclose
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