provisions teaching

provisions teaching - Provisions, Contingent Provisions,...

Info iconThis preview shows pages 1–8. Sign up to view the full content.

View Full Document Right Arrow Icon
Provisions, Contingent Liabilities and Contingent Assets: IAS 37 Provisions, Contingent Liabilities and Contingent Assets: IAS 37
Background image of page 1

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
2 IAS 37 – Overview Objective and scope Recognition Measurement Reimbursements Changes in and use of provisions Application of the recognition and measurement rules Disclosures
Background image of page 2
IAS 37 – Objective and Scope General definition of a liability-IFRS: a present obligation, arising from past events, the settlement of which is expected to require an outflow of economic resources General definition of a liability-C-GAAP: they embody a duty or responsibility to others that entails settlement by future transfer or use of assets, provision of services or other yielding of economic benefits, at a specified or determinable date, on occurrence of a specified event, or on demand;
Background image of page 3

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
4 IAS 37 – Recognition A present obligation can be the result of a constructive and legal obligations are specifically defined as follows: A legal obligation is an obligation that derives from: (a) A contract (through its explicit or implicit terms) (b) Legislation or (c) Other operation of law. A constructive obligation is an obligation that derives from an entity’s actions where: (a) By an established pattern of past practice, published policies, or a sufficiently specific current statement, the entity has indicated to other parties that it will accept certain responsibilities and (b) As a result, the entity has created a valid expectation on the part of those other parties that it will discharge those responsibilities C-GAAP refers to moral or ethical obligation Generally the result of an “obligating event”
Background image of page 4
5 IAS 37 – Objective and Scope The standard defines provisions, contingent liabilities, and contingent assets as follows: A provision is a present obligation as a result of a past obligation that probably requires an outflow of resources where the amount can be reliably measured Probably measured as more likely than not
Background image of page 5

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
6 IAS 37 – Recognition PROVISIONS: Provisions are recognized only when all of the following criteria are met: (a) An entity has a present obligation (legal or constructive) as a result of a past event (considered to eliminate “cookie jar reserves” (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
Background image of page 6
IAS 37 – Objective and Scope A contingent liability is (a) A possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity or (b) A present obligation that arises from past events but is not recognized because (i) it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation, or (ii) the amount of the obligation cannot be measured with sufficient reliability
Background image of page 7

Info iconThis preview has intentionally blurred sections. Sign up to view the full version.

View Full DocumentRight Arrow Icon
Image of page 8
This is the end of the preview. Sign up to access the rest of the document.

This note was uploaded on 12/18/2011 for the course ACC acc621 taught by Professor Sydor during the Fall '10 term at Ryerson.

Page1 / 60

provisions teaching - Provisions, Contingent Provisions,...

This preview shows document pages 1 - 8. Sign up to view the full document.

View Full Document Right Arrow Icon
Ask a homework question - tutors are online