Topic 18

Question 1

Provision

Answer 1

liability of uncertain timing & amount

Question 2

When to recognise a provision?

Answer 2

• present obligation
• probable outflow
• reliable estimate

Question 3

can you avoid the obligation by your future actions?

Answer 3

yes - no provision

no - provision

Question 4

contingent liability

Answer 4

• possible obligation
• outflow is possible
• disclose a note

Question 5

contingent asset

Answer 5

• possible asset
• probable inflow
• disclose a note