Section 5210: Contingencies
International Accounting Standard 37
Provisions, Contingent Liabilities and Contingent Assets
1. Contingent Liability
(1) present obligation whose amount cannot be reliably measured
(2) present obligation whose future outflow of resources is not probable
(3) possible obligation whose existence is subject to uncertain future events
2. Contingent Asset
--> possible asset whose existence is subject to uncertain future events
3. Recognition of Provisions, IAS 37.14
Provision is recognised if the following conditions are met:
(1) present obligation from past event
(2) future outflow of resources is probable
(3) amount of obligation can be reliably measured
4. Disclosure of Contingent Liability
Contingent liability is not recognised, IAS 37.14
Contingent liability is disclosed, IAS 37.86
5. Disclosure of Contingent liability is not required
--> if future outflow of resources is remote, IAS 37.86
6. Disclosure of Contingent Asset
Contingent asset is not recognised, IAS 37.31
Contingent asset is disclosed,
--> if future inflow of economic benefits is probable, IAS 37.89
Contingent asset is not disclosed,
--> if future inflow of economic benefits is not probable, IAS 37.89
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