NZ IAS 37 Provisions, Contingent Liabilities, Contingent Assets

Question 1

Liability

Answer 1

A present obligation of the entity to transfer economic resource as a result of past events

Question 1

Provision

Answer 1

A liability of uncertain timing or amount.
Recognised when all following conditions are met:
1. Present obligation from past event
2. Outflow of economic benefits will be required to settle the obligation.
3. A reliable estimate of the obligation amount can be made.

Question 2

Contingent Liabilities

Answer 2

Possible obligations whose existence will be confirmed by uncertain future events that are not wholly within the control of the entity.