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Important Stuff on Ind AS 37, Provisions, Contingent Liabilities and Contingent Assets

Indian Accounting Standard (Ind AS) 37, Provisions, Contingent Liabilities and Contingent Assets, Important Material

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Ind AS 37: Provisions, Contingent Liabilities and Contingent Assets

Provisions mean liabilities of uncertain amount and timing. A liability that can be measured using substantial degree of estimates.

As per Ind AS 37, contingent liability is a possible obligation that arises from past event and existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events, not wholly within the control of the entity.

As per Ind As 37, contingent asset is a possible asset that arises from past events, existence of which will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events, not wholly within the control of the entity.

Objectives

The objective of this Standard is to ensure that appropriate recognition criteria and measurement bases are applied to provisions, contingent liabilities and contingent assets and that sufficient information is disclosed in the notes to enable users to understand their nature, timing and amount.

Scopes

This Standard shall be applied by all entities in accounting for provisions, contingent liabilities and contingent assets, except:
(a) those resulting from executory contracts, except where the contract is onerous; and
(b) those covered by another Standard.

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