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(PDF) Quick Reference on Ind AS 37, Provisions Contingent Liabilities and Contingent Assets

Download Quick Reference on Indian Accounting Standard (Ind AS) 37, Provisions Contingent Liabilities and Contingent Assets

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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.

Ind AS 37 prescribes the accounting and disclosures 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.

Ind AS 37 also do not apply to financial instruments (including guarantees) that are within the scope of Ind AS 109, Financial Instruments.

A provision is a liability of uncertain timing or amount.

A liability is a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits.

An obligating event is an event that creates a legal or constructive obligation that results in an entity having no realistic alternative to settling that obligation.

A legal obligation is an obligation that derives from:

(a) a contract (through its explicit or implicit terms);

(b) legislation; or

(c) other operation of law.

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