CAF-6 · Chapter 1 · Question 6 of 15
Which of the following statements regarding future operating losses is correct according to IAS 37?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: C) Provisions shall not be recognized for future operating losses.
Explanation
IAS 37 specifically states that provisions shall not be recognized for future operating losses because they do not meet the definition of a liability (there is no present obligation arising from past events).
More IAS 10, IAS 37 & IFRIC 1 MCQs
- Q8An entity has a customer who owed Rs. 500,000 at the reporting date of 31 December 20X4. On 20 January 20X5, before the financial…
- Q9According to IFRIC 1, if an entity uses the cost model for an asset, how should a decrease in the estimated decommissioning liability due…
- Q10An entity is facing a lawsuit. The entity's legal counsel advises that the probability of losing the case and paying damages is 'possible'…
- Q11How frequently should an entity review its recognized provisions according to IAS 37?
- Q12After the reporting period but before the financial statements are authorized for issue, management decides to completely liquidate the…