pas 37 Flashcards
(17 cards)
What is recognized only when it is virtually certain that reimbursement will be received?
Reimbursement
Reimbursement is treated as a separate asset.
How should the expense relating to a provision be presented if a reimbursement is recognized?
Net of the amount recognized for a reimbursement
What must be done to provisions at the end of each reporting period?
Reviewed and adjusted to reflect the current best estimate
What happens to a provision if it is no longer probable that an outflow of resources will be required?
The provision shall be reversed
Under what condition is a warranty accounted for in accordance with PFRS 15?
If a customer has the option to purchase a warranty separately
If a warranty is not purchased separately, under which standard is it accounted?
PAS 37 Provisions, Contingent Liabilities and Contingent Assets
When is a customer option to acquire additional goods or services accounted for under PFRS 15?
If it provides a material right
What is the recognition criteria for a provision?
Present obligation, probable outflow of resources, reliable estimate of obligation
What defines a provision?
A liability of uncertain timing or amount
How do provisions differ from other liabilities?
Provisions involve uncertainty about timing or amount of expenditure
Where are provisions reported in financial statements?
Reported separately from other liabilities
What must be estimated for provisions?
The amount of the obligation
What is the present value in the context of provisions?
The amount of expected expenditures required to settle the obligation
Are gains from the expected disposal of assets considered in measuring a provision?
No, gains are not taken into account
What is recognized when it becomes probable that an entity will be held liable for a guarantee?
A provision for the guarantee for indebtedness of others
What is a contingent asset?
An asset that may arise depending on the outcome of a future event
What is the difference between a provision and a contingent liability?
A provision is a present obligation, while a contingent liability is a potential obligation
