liability in terms of IAS 37 paragraph 10 and the general recognition criteria set out for provisions in IAS 37 paragraph 14 (IAS 37 paragraph 63, 64). there is a binding sale agreement [IAS 37.78], Restructuring by closure or reorganisation, Only when a detailed form plan is in place and the entity has started to implement the plan, or announced its main features to those affected. IFRS 3 paras 45, 49, B67, adjustments made in measurement period, prior year adjustment; ... IAS 37 para 92, seriously prejudicial exemption for non-disclosure of certain information on provisions. IAS 37 Provisions, Contingent Liabilities and Contingent Assets This guidance accompanies, but is not part of, IAS 37. Paragraph 4.1.190.10 of the 13th edition 2016/17 of our publication : Insights into IFRS . All the paragraphs have equal authority but retain the IASC format of the Standard when it was adopted by the IASB. However, if an entity has a contract that is onerous, the present obligation under the contract shall be recognised and measured as a provision (IAS 37 paragraph … In these cases IAS 37 requires that the general nature of the dispute is disclosed. Examples: included in the cost of inventories, or an obligation for environmental cleanup when a new mine is opened or an offshore oil rig is installed. The Standard thus aims to ensure that only genuine obligations are dealt with in the financial statements – planned future expenditure, even where authorised by the board of directors or equivalent governing body, is excluded from recognition. IAS 37 (para.42) requires that, the risks and uncertainties surrounding the events and circumstances should be taken into account in reaching the best estimate of a provision. However, disclosure is not required if payment is remote. All the paragraphs have equal authority but retain the IASC format of the Standard when it was adopted by the IASB. Possible solutions The Board could specify in IAS 37 whether the rate used to discount provisions should include or exclude own credit risk. IAS 37 International Accounting Standard 37 Provisions, Contingent Liabilities and Contingent Assets (IAS 37) is set out in paragraphs 1–95. Provisions are measured at the best estimate (including risks and uncertainties) of the expenditure required to settle the present obligation, and reflects the present value of expenditures required to settle the obligation where the time value of money is material. Insights 4.1.190.10. For example, present obligation as a result of past events, settlement is expected to result in an outflow of resources (payment), a possible obligation depending on whether some uncertain future event occurs, or, a present obligation but payment is not probable or the amount cannot be measured reliably, a possible asset that arises from past events, and. IAS 37 Provisions, Contingent Liabilities and Contingent Assets . IAS 37 the term ‘contingent’ is used for liabilities and assets that are not recognised because their existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. They constitute a standardised way of describing the company’s financial performance and position so that company financial statements are understandable and comparable across international boundaries. Paragraph IAS 38.25 states that the probability recognition criterion is always considered to be satisfied for separately acquired intangible assets. [IAS 37.45 and 37.47], forecast reasonable changes in applying existing technology [IAS 37.49], ignore possible gains on sale of assets [IAS 37.51], consider changes in legislation only if virtually certain to be enacted [IAS 37.50], Review and adjust provisions at each balance sheet date. Section 6, paragraphs 6.1–6.9. Therefore, contrary to IAS 37, the acquirer recognises a contingent liability assumed in a business combination at the acquisition date even if it is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation. In relation to the initial measurement, paragraph 36B requires measuring the liability at the lowest of the amounts that the entity would have to pay to cancel or transfer the liability and the present value of the resources required to fulfil the obligation. Reimbursements Some or all of the expenditure required to settle a provision is expected to be reimbursed by another party. The Committee observed that paragraph 47 of IAS 37 states that ‘risks specific to the liability’ should be taken into account in measuring the liability. International Accounting Standards Board (IASB) for comment only. 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