Events after reporting period

Question 1

Liability

Answer 1

• a present obligation
• arising from past events
• the settlement of which is expected to result in an outflow of resources embodying economic benefits
  Recognition:
• reliably measurable
• outflow of economic benefits is probable

Question 2

Provision

Answer 2

Liability that involves uncertainty of either or both:
- amount of the outflows or
- timing of the outflows
Recognised:
- journalised as a liability
- disclosed separately to liabilities

Question 3

Contingent liability

Answer 3

Obligation that either
- do not meet the liability definition or
- do not meet the recognition criteria
Recognised:
- no journal is processed
- disclosed if considered useful

Question 4

Contingent liability:
liability not met

Answer 4

• A possible obligation
• from past events
• whose existence will be confirmed only by the
• occurrencw or non-occurrence
• of one or more uncertain future events
  -not wholly within the control of the entity

Question 5

Contingent liability:
liability recognition criteria not met

Answer 5

• a present obligation
  -from past events
• that not recognised because the recognition criteria are not met:
• not probable that an outflow of economic benefits will be needed to settle the obligation
• amount of the obligation cannot be measured with sufficient reliably

Question 6

Obligating event

Answer 6

• an event that
• creates a legal or constructive obligation
• that results in an entity having no choice but settle the amount owing