Course Hero Logo

IAS 37 Provisions, Contingent liabilities and assets.pptx -...

Course Hero uses AI to attempt to automatically extract content from documents to surface to you and others so you can study better, e.g., in search results, to enrich docs, and more. This preview shows page 1 - 8 out of 24 pages.

IAS 37 — Provisions,Contingent Liabilities andContingent Assets
IntroductionA provision is aliabilityofuncertain timingoramount.2
IntroductionA liability is apresent obligationof the entityarising from past events, the settlement ofwhich is expected to result in anoutflowfromthe entity ofresources embodying economicbenefits.3
IntroductionAn obligating event is an event that creates alegalorconstructive obligationthat results in an entity having norealistic alternative to settling that obligation.A legal obligation is an obligation that derives from: a contract(through its explicit or implicit terms);legislation; or other operationof law.A constructive obligation is an obligation that derives from an entity’sactions where: by an established pattern of past practice, publishedpolicies or a sufficiently specific current statement, the entity hasindicated to other parties that it will accept certain responsibilities;and as a result, the entity has created a valid expectation on the partof those other parties that it will discharge those responsibilities.4
IntroductionA contingent liability is:a possible obligation that arises from past events andwhose existence will be confirmed only by the occurrenceor non‑occurrence of one or more uncertain future eventsnot wholly within the control of the entity; ora present obligation that arises from past events but isnot recognised because:it is not probable that an outflow of resources embodyingeconomic benefits will be required to settle the obligation; orthe amount of the obligation cannot be measured with sufficientreliability.5
IntroductionA contingent asset isa possible asset that arises from past events andwhose existence will be confirmed only by theoccurrence or non‑occurrence of one or moreuncertain future events not wholly within thecontrol of the entity.6
Provisions vs other LiabilitiesProvisions can be distinguished from other liabilitiessuch as trade payables and accruals because thereis uncertainty about the timing or amount of thefuture expenditure required in settlement.

Upload your study docs or become a

Course Hero member to access this document

Upload your study docs or become a

Course Hero member to access this document

End of preview. Want to read all 24 pages?

Upload your study docs or become a

Course Hero member to access this document

Term
Spring
Professor
NoProfessor

Newly uploaded documents

Show More

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture

  • Left Quote Icon

    Student Picture