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International Accounting Standards (IAS)
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| U.S. GAAP | IFRS, IAS | Accounting Topics |
International Accounting Standard (IAS) 37
Provisions, Contingent Liabilities and Contingent Assets
International Financial
Reporting Standards (IFRS) |
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International Accounting
Standards (IAS) |
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U.S. GAAP by Topic |
| International Accounting Standard (IAS) 37 |
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IAS 37
Provisions, Contingent Liabilities and Contingent
Assets Issued in
September 1998 Recent amendment:
by IFRS 3 revised in January 2008 |
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What is a
provision? --> a liability that has uncertain timing or uncertain amount A provision
is a liability. |
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Provisions
are recognised only if the following conditions are met: (1) a present obligation exists (2) it is probable that outflow of resources is required (3) the amount of obligation can be reasonably estimated |
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What is a
contingent liability? --> a possible obligation that will be confirmed by uncertain future events. |
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A
contingent liability is not recognised in the financial statements. |
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Disclosure
of a contingent liability (1) if the possibility of outflow in settlement is remote --> disclosure is not required (2) if the possibility of outflow in settlement is not remote --> disclosure is required |
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What is a
contingent asset? --> a possible asset that will be confirmed by uncertain future events. |
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A
contingent asset is not recognised in the financial statements. |
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Disclosure
of a contingent asset (1) if an inflow of economic benefits is probable --> disclosure is required (2) if an inflow of economic benefits is not probable --> disclosure is not required |
