ias 37

 

  • [6] 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.

  • [3] Overview Provisions[edit] 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
    reliably.

  • It sets out the accounting and disclosure requirements for provisions, contingent liabilities and contingent assets, with several exceptions,[1] establishing the important
    principle that a provision is to be recognized only when the entity has a liability.

  • [4] 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.

  • [7] 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.

 

Works Cited

[‘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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