Contents

• IAS 37 PROVISIONS, CONTINGENT LIABILITIES AND CONTINGENT ASSETS 1
• INTRODUCTION 1
• OBJECTIVE 1
• RECOGNITION CRITERIA 2
• ANALYSIS OF PROVISIONS AND DISCLOSURE OF CONTINGENCIES IN THE FINANCIAL STATEMENT OF COMPANIES 4
• ISSUES 6
• RECOMMENDATIONS 7
• CONCLUSION 7
• Bibliography 8

Description

This report is based on the following requirement -
“IAS 37 Provisions, Contingent Liabilities and Contingent Assets outlines the accounting for provisions (liabilities of uncertain timing or amount), together with contingent assets (possible assets) and contingent liabilities (possible obligations and present obligations that are not probable or not reliably measurable). 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.
IAS 37 was issued in September 1998 and is operative for periods beginning on or after 1 July 1999”.
http://www.iasplus.com/en/standards/ias/ias37
Required:
Write a report covering following:
• Introduction, objective and recognition criteria of IAS 37 Provisions, Contingent assets and contingent liabilities.
• Study the financial statements of different companies and select five companies which have either created provision or had to deal with contingent asset/liability.
• Discuss the nature of such provisions/contingencies and reasoning behind their creation. Analyse the impact of provisions on the financial performance and position of these companies.
• What are the major issues in current standard on provisions? How is IASB trying to address these issues?