Chapter 6 - Held for Sale and Discontinued Operations

Question 1

Which standard covers contingent assets and liabilities?

Answer 1

IAS 37

Question 2

Which standard covers provisions?

Answer 2

IAS 37

Question 3

What is the objective of IAS 37?

Answer 3

To ensure appropriate recognition criteria and measurement of provisions, contingent liabilities and contingent assets

Question 4

What is the definition of provision under IAS 37 ?

Answer 4

Liability where there is uncertainty over its timing or the amount at which it will be settled

Question 5

What is the definition of contingent liability under IAS 37?

Answer 5

Significant uncertainty about a number of aspects of the liability.

Event occurred in the past that may lead to the entity having a liability in the future, but will only be confirmed by the outcome of some future event.

Question 6

What are the key features of a contingent liability under IAS 37?

Answer 6

• Past event
• May lead to liability
• Depends on factors outside the entity’s control

Question 7

What is the following likely to be classified as?

The giving of a guarantee to another entity that is in financial difficulty

Answer 7

A contingent liability under IAS 37

Question 8

If a liability does not meet the