IAS 37 Provision and Contigencies
OBLIGATING EVENT
Warranties
Refurblishment
Onerous contract
Environmental and similar provisions
Restructurings
Recognition criterias
Detailed formal plan
Must be communicated to all affecteed parties
PROVISION
Liability of uncertain timing or amount
Recognized
Present obligation
Reliable estimate of the amount involved
Initial measurement
One-off events are measured at the most likely amount
Large populations or events are measured at a probability-weighted expected value
Expected cash outflows should be discounted to their present values
Discount rate should be pre-tax rate
CONTIGENT ASSETS
Definition
Recognized
Recognize --> Virtually
Disclosure --> Probable
Do nothing --> Possible
CONTIGENT LIABILITIES
Definition
Recognized
Disclosure --> Possible
Do nothing --> Remote
Recognize --> Probable provision