IAS 37

Question 1

Recognition

Answer 1

-present oblg as result of past event
-probable outflow of economic benefits
-oblg can be measured reliably

Question 2

What if laws taken place after reporting date, what dshd be done to provision if e’ has recog in the year?

Answer 2

No provision shd berecog as there is no present oblg.
E’ can change the nature of operations to avoid expenditure (provision)

Question 3

What qualifies an executory/ onerous contract?

Answer 3

Restructuring plan
-detailed plan
-communicated/annoucement made
-only direct expenses

Question 4

E’ entered into a contract where contract price has fallen by end of the year, but predicted to rise again next year, shd provision be recog?

Answer 4

Is an executory contract which contract has not been fully fulfilled/ performed. Shd not be recog unless onerous.

No provision be recog, bcs evidence that prices may rise again.