Provisions contingent liabilities and contingent assets参考.ppt

Contingencies Contingent liabilities a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence of one or more uncertain future events not wholly within the entity’s control, or a present obligation that arise from past events but is not recognised because: it is not probable that a transfer of economic benefits will be required to settle the obligation, or the amount of the obligation cannot be measured with sufficient reliability. F7 * Continued Contingent asset a possible asset that arise from past events and whose existence will be confirmed only by the occurrence of one or more uncertain future events not wholly within the entity’s control. F7 * Recognition F7 * degree of probability contingent liabilities contingent assets virtually certain recognise recognise probable recognise disclosure by note possible disclosure by note no disclosure remote no disclosure no disclosure example8, p381 example9, p382 Disclosure For each class of contingent liability (unless remote): An estimate of its financial effect An indication of the uncertainties relating to the amount or timing of any outflow The possibility of any reimbursement For contingent assets (only where probable): a brief description of their nature where practicable, an estimate of its financial effect. F7 * Exercises 5c Pilot01 with discontinued operations 5c Dec01 with inventory 3, Dec03 5(i, iii) Jun05 5b(iii) Jun07 4 Dec08 F7 * F7 F7 F7 F7 F7 F7 F7 F7 F7 F7 F7 F7 F7 IAS37 Provisions, contingent liabilities and contingent assets Syllabus C7 Provision A liability of uncertain timing or amount Should not be used in international accounting to refer to normal accounting estimates (e.g. for depreciation, doubtful debts) F7 * Recognition Only recognised where: 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, and a reliable estimate can be ma