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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.

Published September 1998. Effective 1 July 1999.

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*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.

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Synopsis

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.

Which version of the standard?

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Annual period starts
Effective version of standard
Notes on amendments 
On or after 1 January 2023 IAS 37 2021 Issued Standards Includes amendments 1, 2, 3, 4*, 5 and 6*
1 January 2022 - 31 December 2022 IAS 37 2021 Required Standards and Onerous Contracts - Cost of Fulfilling a Contract
Includes amendments 1-3, 5 and 6*
1 January 2020 – 31 December 2021
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

*Not UK endorsed as at 22 June 2021. Read more on UK endorsement of IFRS standards. Not EU endorsed as at 22 June 2021. Read more on EU endorsement of IFRS standards.

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 2021 Issued Standards.

Recent amendments

Full access to details of all the amendments is only available to Financial Reporting Faculty members. Find out how to join the faculty.

*Not UK endorsed as at 22 June 2021. Read more on UK endorsement of IFRS standards. Not EU endorsed as at 22 June 2021. Read more on EU endorsement of IFRS standards.

Current proposals

  1. The Board is developing proposals for targeted improvements to IAS 37 in order to:
  • align the definition of a liability and requirements for identifying liabilities with the Conceptual Framework, and
  • clarify which costs to include in the measurement of provision, and
  • specify whether the rate at which an entity discounts a provision should reflect the entity's own credit risk.

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. UK companies applying FRS 101 are required to provide additional specific numeric and narrative disclosures.

Disclosure exemptions

There are no disclosure exemptions from IAS 37.

Other resources

This page was last updated 22 June 2021