IAS 37 Provisions, Contingent Liabilities and Contingent Assets sets the recognition criteria and measurement bases to be applied to provisions, contingent liabilities and contingent assets.
Published September 1998. Effective 1 July 1999.
IAS 37 requires that a provision is only recognised where:
The amount of the provision should be the best estimate of the amount required to settle the obligation at the reporting date.
Contingent liabilities are not recognised, but are disclosed unless the possibility of an outflow of economic resources is remote.
Contingent assets are not recognised, but are disclosed where an inflow of economic benefits is probable.
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IFRIC 1 provides guidance on accounting for changes in decommissioning, restoration and similar liabilities that have previously been recognised both as part of the cost of a non-current asset and as a provision.
IFRIC 5 provides guidance on how a contributor to a decommissioning fund should account for its interest in a fund, including its right to receive reimbursement from such a fund.
IFRIC 6 clarifies when producers of electrical goods must recognise a liability under IAS 37 for the cost of managing waste electrical and electronic equipment.
IFRIC 13 provides guidance on accounting for loyalty award credits granted to customers. Where the expected costs of meeting the award obligation exceed the consideration received, the resulting onerous contract is accounted for in accordance with IAS 37.
Provides guidance on when to recognise a liability for a levy imposed by a government.
The IASB issued a proposed new standard on Insurance Contracts in July 2010. A revised exposure draft was issued in June 2013. When this standard is finalised, it intends to amend IAS 37 to delete an example which illustrates existing requirements for financial guarantee contracts. This would be replaced with an example illustrating the IAS 37 requirements for other guarantee obligations that would continue to be within the scope of IAS 37.
ED/2010/9 Leases was issued in August 2010. The revised ED/2013/6 Leases was issued in May 2013. It proposes fundamental changes to the way in which leases are accounted for and would result in amendments to IAS 37 to clarify which leases fall within the scope of that standard. Example 8 in respect of an onerous contract would also be deleted from the appendix to IAS 37. A final standard is expected in 2015.
This page was last updated 5 September 2014