CAF-6 · Chapter 1 · Question 15 of 15
When does an obligation to the public at large qualify as a valid obligation for recognizing a provision under IAS 37?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) If the entity has created a valid expectation through past practice or published policies.
Explanation
An obligation always involves another party. However, it is not necessary to know the specific identity of the party; an obligation can be owed to the public at large if a valid expectation has been created (a constructive obligation).
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