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PROVISIONS, CONTINGENT LIABILITIES AND ASSETS




            Recognition







            Provisions


            • A provision must be recognised when

                    • (a) an entity has a present obligation (legal or constructive) as a
                       result of a past event;

                    • (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.

            • If not all these conditions are met, no provision should be

                recognised (IAS 37.14).

















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