IAS37_06 - IAS 37 International Accounting Standard 37...

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IAS 37 © IASCF 1597 International Accounting Standard 37 Provisions, Contingent Liabilities and Contingent Assets This version includes amendments resulting from new and amended IFRSs issued up to 31 December 2005.
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IAS 37 1598 © IASCF C ONTENTS paragraphs INTRODUCTION IN1–IN23 INTERNATIONAL ACCOUNTING STANDARD 37 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS OBJECTIVE SCOPE 1–9 DEFINITIONS 10–13 Provisions and other liabilities 11 Relationship between provisions and contingent liabilities 12–13 RECOGNITION 14–35 Provisions 14–26 Present obligation 15–16 Past event 17–22 Probable outflow of resources embodying economic benefits 23–24 Reliable estimate of the obligation 25–26 Contingent liabilities 27–30 Contingent assets 31–35 MEASUREMENT 36–52 Best estimate 36–41 Risks and uncertainties 42–44 Present value 45–47 Future events 48–50 Expected disposal of assets 51–52 REIMBURSEMENTS 53–58 CHANGES IN PROVISIONS 59–60 USE OF PROVISIONS 61–62 APPLICATION OF THE RECOGNITION AND MEASUREMENT RULES 63–83 Future operating losses 63–65 Onerous contracts 66–69 Restructuring 70–83 DISCLOSURE 84–92 TRANSITIONAL PROVISIONS 93 EFFECTIVE DATE 95 APPENDICES A Tables – Provisions, contingent liabilities, contingent assets and reimbursements B Decision tree C Examples: recognition D Examples: disclosures
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IAS 37 © IASCF 1599 International Accounting Standard 37 Provisions, Contingent Liabilities and Contingent Assets (IAS 37) is set out in paragraphs 1–95. All the paragraphs have equal authority but retain the IASC format of the Standard when it was adopted by the IASB. IAS 37 should be read in the context of its objective, the Preface to International Financial Reporting Standards and the Framework for the Preparation and Presentation of Financial Statements . IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors provides a basis for selecting and applying accounting policies in the absence of explicit guidance.
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IAS 37 1600 © IASCF Introduction IN1 IAS 37 prescribes the accounting and disclosure for all provisions, contingent liabilities and contingent assets, except: (a) those resulting from financial instruments that are carried at fair value; (b) those resulting from executory contracts, except where the contract is onerous. Executory contracts are contracts under which neither party has performed any of its obligations or both parties have partially performed their obligations to an equal extent; (c) those arising in insurance entities from contracts with policyholders; or (d) those covered by another Standard. Provisions IN2 The Standard defines provisions as liabilities of uncertain timing or amount. A provision should be recognised when, and only when: (a) an entity has a present obligation (legal or constructive) as a result of a past event; (b) it is probable (ie more likely than not) 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.
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IAS37_06 - IAS 37 International Accounting Standard 37...

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