ACCA FR · Chapter 8 · Question 1 of 10
Under IAS 37, 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 (legal or constructive) from a past event, a probable outflow of economic benefits, and a reliable estimate of the amount
Explanation
IAS 37 requires all three conditions: a present obligation, legal or constructive, arising from a past event; an outflow of resources that is probable (more likely than not); and a reliable estimate of the obligation. A board decision alone does not create an obligation, because the entity can still change its mind.
More Provisions, contingencies and events after the reporting period MCQs
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