provisions teaching

provisions teaching - Provisions Contingent Provisions...

Info icon This preview shows pages 1–9. 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
Image of page 1

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

View Full Document Right 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
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;
Image of page 3

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

View Full Document Right 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”
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
Image of page 5

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

View Full Document Right 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
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
Image of page 7

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

View Full Document Right Arrow Icon
IAS 37 –
Image of page 8
Image of page 9
This is the end of the preview. Sign up to access the rest of the document.

{[ snackBarMessage ]}

What students are saying

  • Left Quote Icon

    As a current student on this bumpy collegiate pathway, I stumbled upon Course Hero, where I can find study resources for nearly all my courses, get online help from tutors 24/7, and even share my old projects, papers, and lecture notes with other students.

    Student Picture

    Kiran Temple University Fox School of Business ‘17, Course Hero Intern

  • Left Quote Icon

    I cannot even describe how much Course Hero helped me this summer. It’s truly become something I can always rely on and help me. In the end, I was not only able to survive summer classes, but I was able to thrive thanks to Course Hero.

    Student Picture

    Dana University of Pennsylvania ‘17, Course Hero Intern

  • Left Quote Icon

    The ability to access any university’s resources through Course Hero proved invaluable in my case. I was behind on Tulane coursework and actually used UCLA’s materials to help me move forward and get everything together on time.

    Student Picture

    Jill Tulane University ‘16, Course Hero Intern