Page 4 - PowerPoint Presentation
P. 4
PROVISIONS, CONTINGENT LIABILITIES AND ASSETS
Introduction – IAS 37
• The most important aspect in this learning unit is to
determine whether an item is a provision or a
contingent liability.
• A provision complies with the definition of a liability (a
current obligation), except that the timing or amount is
uncertain.
• A contingent liability is a possible obligation whose
existence will be confirmed only by the occurrence or
non-occurrence of one or more uncertain future events
or a present obligation that is not recognised because:
• an outflow of resources is not probable; or
• the amount cannot be measured with sufficient reliability.
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