Download Indian Accounting Standard (Ind AS) 37 Provisions, Contingent Liabilities and Contingent Assets
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.
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
(c) those covered by another Standard.
This Standard does not apply to financial instruments (including guarantees) that are within the scope of Ind AS 109, Financial Instruments.
Executory contracts are contracts under which neither party has performed any of its obligations or both parties have partially performed their obligations to an equal extent. This Standard does not apply to executory contracts unless they are onerous.
When another Standard deals with a specific type of provision, contingent liability or contingent asset, an entity applies that Standard instead of this Standard. For example, some types of provisions are addressed in Standards on
(a) income taxes (see Ind AS 12, Income Taxes);
(b) leases (see Ind AS 116, Leases). However, this Standard applies to any lease that becomes onerous before the commencement date of the lease as defined in Ind AS 116. This Standard also applies to short-term leases and leases for which the underlying asset is of low value accounted for in accordance with paragraph 6 of Ind AS 116 and that have become onerous;
(c) employee benefits (see Ind AS 19, Employee Benefits);
(d) insurance contracts (see Ind AS 104, Insurance Contracts). However, this Standard applies to provisions, contingent liabilities and contingent assets of an insurer, other than those arising from its contractual obligations and rights under insurance contracts within the scope of Ind AS 104;
(e) contingent consideration of an acquirer in a business combination (see Ind AS 103, Business Combinations); and
(f) revenue from contracts with customers (see Ind AS 115, Revenue from Contracts with Customers). However, as Ind AS 115 contains no specific requirement to address contracts with customers that are, or have become, onerous, this Standard applies to such cases.