Conflict between as-4 & as-29

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CA Prabhat Kumar Makhija (Querist)
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12 September 2012 A company had made a contract of sales of goods on a condition that if it will be unable to deliver the goods till 30th april, 2012 it will pay 1 crore as compensation.

Now on 31st march, 2012 management concludes that it will unable to deliver the goods till 30th april, 2012 and it want to create provision of Rs. 1 crore.

Now my question is under which AS this provision will be covered. Whether it would be covered under AS-4, "Events occuring after balance sheet date"
because contingency of event exist on balance sheet date or
under AS-29, "Provisions, Contingent liablities, & Assets" because there is a present obligation arising from past event and amount can be measured using substantial degree of estimation

CA CS Amit S. Kedia

CA CS Amit S. Kedia (Expert)
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12 September 2012 AS 29 is applicable where Provisions are adjusted against the assets in the balance sheet.
If there is no assets in the balance sheet then AS-4 is applicable

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CA Prabhat Kumar Makhija

CA Prabhat Kumar Makhija (Querist)
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17 September 2012 thanks sir for your valuable suggestion.
and what about the above given situation whether it will be covered under AS-4 or AS-29

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