Definitions[1]
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IAS 37 defines key terms related to contingencies and provisioning. A contingent liability is a possible obligation that arises from past events, while a contingent asset is a possible asset from past events. A provision is a liability of uncertain timing and amount. Legal obligations derive from contracts, legislation or laws, while constructive obligations come from an entity's actions or past practices. An onerous contract is one where costs exceed benefits, and restructuring involves significant changes to a business's scope or operations.
Definitions[1]
- 1. CONTINGENCIES AND PROVISIONING IAS 37 DEFINITIONS Term Para Description Reference to IAS 37 Contingent 10 It is: Liability (a) a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non- occurrence of one or more uncertain future not wholly within the control of the enterprise (b) a present obligation that arises from past events but not recognised because (i) it is not probable that an outflow of resources embodying economic benefit take place and (ii) the amount of obligation cannot be measured reliably. Contingent 10 It is possible asset that arises from past events and whose Asset existence will be confirmed only by the occurrence or non- occurrence of one or more uncertain future event not wholly within the control of the enterprise. Provision 10 It is a liability of uncertain timing and amount. Liability 10 It is a present obligation of the enterprise arising from past events, settlement of which is expected to have outflow of resources embodying economic benefit. Legal 10 That derives from contract, legislation and other operation obligation of law. Constructive 10 That derives from enterprise’s action. obligation An enterprise by a statement may indicate its acceptance of an obligation. An enterprise has shown its acceptance of certain type of obligation by past practice. Onerous 10 A contract in which unavoidable cost exceed the economic contract benefit to be received under it. Restructuring 10 A restructuring is a program that is planned and controlled by management, and materially changes either: a. the scope of a business undertaken by an entity; b. the manner in which that business is conducted.