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PSAK 57 (Provision, Contigency Liability, Contingency Asset (Asset…
PSAK 57 (Provision, Contigency Liability, Contingency Asset
Asset Contingency
definition
Potential assets arising from past events and their existence become certain with the occurrence or non-occurrence of one or more events in the future that are not fully within the entity's control
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Constructive Obligation
obligation that arise from an entity's action, in this case :
based on past standard practices, published policies or fairly specific new statements, the entity has indicated to other parties that the entity will accept certain responsibilities
entity has created a valid estimate for the other party that the entity will carry out this responsibility.
burdensome contract
contract whose unavoidable costs of fulfilling its contractual obligations exceed the economic benefits to be received from the contract
Liability Contigency
definition
potential obligations that arise from past events and their existence become certain with the occurrence or non-occurrence of one or more future events that are not fully within the entity's control
Binding Event
an event that creates a legal obligation or constructive obligation which results in the entity having no other alternative but to settle the obligation
Provision
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Measurement
Amounts recognized as provisions are the best estimate of expenditures needed to settle current obligations at the end of the reporting period
In determining the best estimate of a provision, the entity considers various risks and uncertainties that always affect events and circumstances
If the time value of money is sufficient material, the provision amount is the present value of the estimated expenditure needed to settle the obligation.
Future events that can affect the amount needed to complete an obligation are reflected in the amount of provision if there is objective evidence that the event will occur.
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Replacement
If a portion or all of the expenses for completing the provision are replaced by a third party, then the replacement is recognized only when there is a belief that the replacement will be accepted if the entity completes the obligation. The replacement is recognized as a separate asset
The amount recognized as a replacement must not exceed the provision value. In the report on profit or loss and other comprehensive income, expenses related to provision can be presented on a net basis after deducting the amount recognized as a replacement