IAS 37 Provisions, Contingent Liabilities and Contingent Assets
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.
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IAS 37 requires that a provision is only recognised where:
- There is a legal or constructive present obligation as a result of a past event, and
- Payment is probable, and
- The amount can be reliably estimated.
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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|Annual period starts
||Effective version of standard
||Notes on amendments|
|On or after 1 January 2021||IAS 37 2019 Issued Standards
||Includes amendments 1- 5
|1 January 2020 – 31 December 2020
||IAS 37 2020 Required Standards
||Includes amendments 1 – 3 and 5
|I January 2019 – 31 December 2019
||IAS 37 2019 Required Standards
||Includes amendments 1 – 3
|1 January 2018 – 31 December 2018
||IAS 37 2018 Required Standards
||Includes amendments 1 and 2
|1 January 2017 – 31 December 2017
||IAS 37 2017 Required Standards
||Does not include any amendments
The Required Standards book for a particular year assumes that there is no early application of issued but not yet effective IFRSs; The Issued Standards book assumes early application of all issued IFRSs.
For the latest version of the standard, and where the amendments are to be adopted early, refer to IAS 37 2019 Issued Standards.
Full access to details of all the amendments is only available to Financial Reporting Faculty members. Find out how to join the faculty.
*Not EU endorsed as at 30 January 2020. Read more on EU Endorsement.
- The Board is working on a project to clarify the meaning of the term ‘unavoidable costs’ in the definition of an onerous contract. It intends to amend IAS 37 to clarify that these are costs that relate directly to a contract and to include examples of costs that do and costs that do not relate directly to a contract. An exposure draft was issued in December 2018 and a final amendment is expected in the first half of 2020.
- The Board has begun a research project to decide whether to develop proposals to amend aspects of IAS 37 and if so which aspects to amend. The project is currently at an early stage.
The following interpretations refer to IAS 37
UK reduced disclosures
UK qualifying parents and subsidiaries can take advantage of FRS 101 Reduced Disclosure Framework. Find out more on which entities qualify and the criteria to be met.
Amendments to the standard
IAS 37 allows the non-disclosure of information about provisions and contingent liabilities where disclosure is expected to prejudice the position of an entity in a dispute. In these cases IAS 37 requires that the general nature of the dispute is disclosed. From 1 January 2016, UK companies applying FRS 101 are required to provide additional specific numeric and narrative disclosures.
There are no disclosure exemptions from IAS 37.
This page was last updated 30 January 2020.