Page 175 - F3 -FA Integrated Workbook STUDENT 2018-19

Payables, provisions and contingent liabilities

Upon recognition of a provision there must be an estimate of the potential cost of the
uncertain event and immediate recognition in the financial statements. This is
achieved with the following accounting entries:

Debit Expenses

Credit Provision

The provision will be classed as either a current or non-current liability. Provisions
should be reviewed at each reporting date and adjusted to reflect current best
estimate.

169