Provisions and Contingencies – IAS 37

CA. Amit Daga (Finance Controller CA. CS. CFA. CIFRS. M.COM. )   (9012 Points)

17 August 2009  

 

 
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 Provisions and Contingencies – IAS 37
 
  Provision:-  A liability of uncertain timing or amount.
   Contingent liability :-  A possible obligation arising from past events whose existence will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events that are not completely within the control of the entity. 
   Contingent asset. A possible asset arising from past events and whose existence will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events that are not completely within the control of the entity.
   Executory contract:- A contract under which neither party (to the contract) has performed its obligations or both the parties (to the contract) have performed their obligations partially to an equal extent.
   Onerous contract. Onerous Contract is a contract where the costs involved with fulfilling the terms and conditions of the contract are higher than the amount of economic benefit received.
   Restructuring A program that is planned and controlled by the management and materially changes either the scope of a business undertaking by an entity or the manner in which that business is conducted.