CAF-6 · Chapter 1 · Question 13 of 15
Which of the following describes the key characteristic of an 'obligating event' under IAS 37?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) It exists independently of an entity's future actions.
Explanation
An obligating event is a past event that leads to a present obligation. It must exist independently of an entity's future actions (i.e., the future conduct of its business).
More IAS 10, IAS 37 & IFRIC 1 MCQs
- Q15When does an obligation to the public at large qualify as a valid obligation for recognizing a provision under IAS 37?
- Q1A company's reporting period ends on 31 December 20X5. On 15 February 20X6, before the financial statements are authorized for issue, a…
- Q2Omega Industries causes environmental damage in a country where there is no environmental legislation forcing a cleanup. However, Omega…
- Q3Delta Ltd faces claims from 20 customers for faulty products. The company estimates that each claim will be settled in the range of Rs…
- Q4Sigma Corp provides a warranty for its products. Based on past experience, there is a 60% chance of zero repair costs, a 30% chance of…