IAS 37Chapter 9Lesson 1
Disclosures about provisions and contingencies
Step 1 of 7Learning objectives
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For each class of provisions, the entity discloses a reconciliation table (opening, additions, uses, reversals, unwinding and effect of the rate, closing) and a description: nature, timing, uncertainties, assumptions, expected reimbursements. It describes its contingent liabilities unless the outflow is remote, and its contingent assets when the inflow is probable, without suggesting that income is more likely than it is. Information that is impracticable to provide is flagged; in extremely rare cases, information that could seriously prejudice the entity in a dispute may be omitted, stating the nature of the dispute, the fact and the reason.
Learning objectives
- Prepare the reconciliation table by class of provisions and identify the qualitative information required.
- Determine the classes of provisions and contingent liabilities according to the similarity of the items' nature.
- Identify the information on contingent liabilities (unless the outflow is remote) and contingent assets (if the inflow is probable), without misleading indications.
- Assess the use of the serious-prejudice exemption and the minimum information still required.