IAS 37 Provisions, contingent liabilities and contingent assets文档文档.ppt

 IAS 37 Provisions, Contingent Liabilities and Contingent Assets IAS 37 Provisions, Contingent Liabilities and Contingent Assets Objective Scope Definitions Provisions Contingent Liabilities Contingent Assets Disclosure PROVISIONS A provision should be recognised when: An entity has a present obligation (legal or constructive) as a result of a past event; It is probable that a transfer of economic benefits will be required to settle the obligation; and A reliable estimate can be made of the amount of the obligation. If these conditions are not met, no provision should be recognised PRESENT OBLIGATION A present obligation arises if, taking account of all the available evidence, it is more likely than not that an obligation exists at the reporting date PAST EVENT An event that creates a legal or constructive obligation that results in an entity having no realistic alternative to settling that obligation Obligation - Legal An obligation that derives from: A contract (through explicit or implicit terms) Legislation Other operation of law Obligation - Constructive An obligation that derives from an entity’s actions where: By established pattern of past practice, published policies or a sufficiently specific current statement, the entity has indicated to other parties that it will accept certain responsibilities; and As a result, the entity has created a valid expectation on and a the part of those other parties that it will discharge those responsibilities. PROBABLE TRANSFER OF ECONOMIC BENEFITS  Regarded as a probable if the event is more likely than not to occur i.e. the probability that the event will occur is greater than that the probability that it will not RELIABLE ESTIMATE OF THE OBLIGATION An estimate of the obligation, based upon a the range of possible outcomes is acceptable Where no reliable estimate can be made, the liability cannot be recognised and should be disclosed as a