The amendments were controversial for setting out rules on how entities would account for legal cases in their financial statements; it would require firms to recognize
the contingent liability as a weighted average of the possible outcomes of a legal case.
 Overview Provisions IAS 37 establishes the definition of a provision as a “liability of uncertain timing or amount”, and requires that all the following conditions
be fulfilled before a provision can be recognized: 1. the entity currently has a liability as a result of a past event; 2. an outflow of resources is likely to be needed to settle the liability; and 3. the amount of the obligation can be estimated
It sets out the accounting and disclosure requirements for provisions, contingent liabilities and contingent assets, with several exceptions, establishing the important
principle that a provision is to be recognized only when the entity has a liability.
 The standard also details measurement methods for provisions, generally requiring that the entity recognises a best estimate of the amounts needed to settle the obligation.
 In 2018, the IASB issued an exposure draft to provide specific requirements on what constitutes ‘unavoidable costs’ in the definition of onerous contract in IAS 37.
[‘IFRS Foundation, 2012. International Accounting Standard 37: Provisions, Contingent Liabilities and Contingent Assets. Retrieved on April 24, 2012.
2. ^ Deloitte Global Services Limited, 2012. IAS 37 — Provisions, Contingent Liabilities and Contingent
Assets. Retrieved on April 24, 2012.
3. ^ Williams J, 1999. IAS 37, PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS Archived 2012-04-15 at the Wayback Machine. Retrieved on April 25, 2012.
4. ^ Jump up to:a b IASC Foundation, 2009. IAS
37 Provisions, Contingent Liabilities and Contingent Assets Archived 2011-11-19 at the Wayback Machine. Retrieved on April 25, 2012.
5. ^ PWC, 2012. Provisions, Contingent Liabilities, and Contingent Assets. Retrieved on April 25, 2012.
6. ^ IFRS
Foundation, 2012. Liabilities – amendments to IAS 37 (Paused). Retrieved on April 24, 2012.
7. ^ Christodoulou M, 2012. IAS 37 rule on legal costs set to cause confusion. Retrieved on April 24, 2012.
8. ^ “Onerous Contracts — Cost of Fulfilling
a Contract (Amendments to IAS 37)”. IFRS.org. Retrieved 2019-02-26.
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