ACCA FA · Chapter 8 · Question 1 of 10
Under IAS 37 Provisions, Contingent Liabilities and Contingent Assets, which set of conditions must ALL be met before a provision is recognised?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: A) A present obligation from a past event, a probable outflow of economic benefits, and a reliable estimate of the amount
Explanation
IAS 37 requires three conditions: a present obligation (legal or constructive) as a result of a past event, a probable outflow of resources embodying economic benefits, and a reliable estimate of the obligation. A board decision alone does not create an obligation, and absolute certainty is not required.
More Payables, provisions and contingencies (IAS 37) MCQs
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- Q6Which of the following should be recognised as a provision at the reporting date?
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