BÀI GIẢNG kế TOÁN QUỐC tế chapter 13 provisions and contingencies

IAS 37 •Provision A liability of uncertain timing or amount •Liability An obligation of an entity to transfer economic benefits as a result of past transactions or events... IAS 37 Cons

Chapter 13

PROVISIONS AND CONTINGENCIES

Learning Objectives

1 IAS 37

IAS 37

•Provision

A liability of uncertain timing or amount

•Liability

An obligation of an entity to transfer

economic benefits as a result of past

transactions or events

IAS 37

Constructive obligation

• An obligation that derives from an entity’s actions where:

• By an 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

• As a result, the entity has created a valid

expectation on the part of those other parties that

IAS 37

•Important

The amount recognised as a provision should be the best estimate of the expenditure required to

settle that present obligation

•Restructuring

A programme planned and controlled by

management Materially changes scope of

business and/or the way the business is conducted

IAS 37

IAS 37

• Note Restructuring is not usually triggered

by a management decision alone Other

events, such as negotiations with

employee representatives, need to take

place

IAS 37

Contingent Liability

• A possible obligation that arises from past

events, whose existence will be confirmed by the occurrence or non-occurrence of future

events not wholly in the entity’s control

• A present obligation not recognised because:

– It is not probable that settlement of the

obligation will be required

– The amount cannot be measured

IAS 37

Contingent Asset

A possible asset that arises from past events and whose existence will be confirmed by

the occurrence of one or more uncertain

future events not wholly within the entity’s

control