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Pas 37 Toa

A provision is a possible obligation arising from past events where it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. According to PAS 37, a provision shall be recognized as a liability when an entity has a present obligation arising from a past event, where it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. A legal obligation arises from contractual obligations or other laws and regulations, but not from constructive obligations.

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Vincent Larrie Moldez
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62 views1 page

Pas 37 Toa

A provision is a possible obligation arising from past events where it is probable that an outflow of resources will be required to settle the obligation and the amount can be reliably estimated. According to PAS 37, a provision shall be recognized as a liability when an entity has a present obligation arising from a past event, where it is probable that an outflow of resources will be required to settle the obligation, and the amount can be reliably estimated. A legal obligation arises from contractual obligations or other laws and regulations, but not from constructive obligations.

Uploaded by

Vincent Larrie Moldez
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
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Download as DOCX, PDF, TXT or read online on Scribd
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THEORY OF ACCOUNTS

PAS 37- PROVISIONS, CONTINGENT LIABILITIES, AND CONTINGENT ASSETS

1. Which of the following is the correct definition of a provision?


a. A possible obligation arising from past events.
b. A liability of uncertain timing or amount
c. A liability which cannot be easily measured.
d. An obligation to transfer funds to an entity
2. A provision shall be recognized as a liability under which of the following conditions?
a. The entity has a present obligation, legal or constructive as a result of a past event.
b. It is probable that an outflow of resources embodying economic benefits would be required
to settle the obligation.
c. The amount of the obligation can be measured reliably.
d. All of these.
3. A legal obligation is an obligation that is derived from all of the following, except?

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