Measurement of the provision

• Obligation measured (nature, large population or single obligation, expected timing)

  TextRequired

  ACCESS_TRACK_RESTORATION

• Possible outcomes and probabilities (the probabilities sum to 100 %)

  Table

  Case data or management estimate: the outcomes and their probabilities are data, never set by the standard.

• Continuous range of equally likely outcomes: low end + high end

  Number

• Percentage applied to the sum of the ends to obtain the midpoint (50)

  Number

  The midpoint of a range is half the sum of its ends: enter 50.

• Pre-tax discount rate (%)

  Number

  8 %

  Case data: the standard describes the characteristics of the rate (para. 47) without setting a rate.

• Number of periods until the expected outflow (years; 0 if discounting is not material)

  Number

  1 units

  Model assumption: a single outflow at a given date. With 0 periods, the present value equals the expenditure retained; discounting is required only where the effect of the time value of money is material (para. 45).

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IAS 37IAS 37IAS 37IAS 37 §39IAS 37IAS 37IAS 37 §42IAS 37 §43

• Points examined

  ChecklistRequired

  • Amount the entity would rationally pay to settle the obligation at the reporting date or to transfer it to a third party at that date
  • Management judgement, experience of similar transactions, experts' reports, events after the reporting period
  • Large population: expected value (outcomes weighted by their probabilities)
  • Continuous range of equally likely outcomes: midpoint of the range
  • Single obligation: most likely outcome, a higher or lower estimate if the other outcomes are mostly higher or mostly lower
  • Measured before tax (tax consequences under IAS 12)
  • Risks and uncertainties taken into account, without excessive provisions or double counting of risk adjustments

IAS 37 §45IAS 37IAS 37 §47

• Points examined

  ChecklistRequired

  • Effect of the time value of money material: provision at the present value of the expected expenditures
  • Pre-tax rate reflecting current market assessments of the time value of money and the risks specific to the liability
  • Risks already reflected in the estimated cash flows not reflected again in the rate

IAS 37 §48IAS 37 §49IAS 37 §50IAS 37 §51IAS 37 §52

• Points examined

  Checklist

  • Future event reflected only where there is sufficient objective evidence that it will occur
  • Technological change: reasonable expectations of qualified and objective observers; entirely new technology only if supported by objective evidence
  • Possible new legislation: taken into account if its enactment is virtually certain (evidence of its content, its enactment and its implementation)
  • Gains from the expected disposal of assets excluded, even if the disposal is closely linked to the event giving rise to the provision

• Expected disposal gains (amount not included in the provision)

  Number

IAS 37 §8IAS 37 §39IAS 37IAS 37 §45IAS 37 §47

• Expected value (Σ amount × probability)

  Calculation

  Possible outcomes and probabilities (the probabilities sum to 100 %)

• Most likely individual outcome (before any adjustment)

  Calculation

  Possible outcomes and probabilities (the probabilities sum to 100 %)

• Midpoint of the range ((low end + high end) × 50 %)

  Calculation

  Continuous range of equally likely outcomes: low end + high end ; Percentage applied to the sum of the ends to obtain the midpoint (50)

• Provision to recognise: present value of the expenditure retained (expenditure / (1 + rate)^n)

  CalculationRequired

  50,000

  Expenditure retained as the best estimate, before discounting ; Pre-tax discount rate (%) ; Number of periods until the expected outflow (years; 0 if discounting is not material)

• Part of the provision recognised as an expense

  Number

• Part included in the cost of an asset where the standard applying to that asset so provides (IAS 16 for property, plant and equipment; IAS 37, para. 8)

  Number

  50,000

• Provision recognised as an expense

  Entry

  Debit Provision expense ← Part of the provision recognised as an expense ; Credit Provision ← Part of the provision recognised as an expense

• Provision included in the cost of an item of property, plant and equipment

  Entry

  Account	Debit	Credit
  Property, plant and equipment	50,000
  Provision		50,000

  Which standard does what. IAS 37: recognition and measurement of the obligation (the provision); IAS 37 neither requires nor prohibits capitalisation, which is left to other standards (para. 8). IAS 16: inclusion of the initial dismantling cost in the cost of the item of property, plant and equipment, when the applicable criteria are met (to be established by the case data). IFRIC 1: subsequent changes in that existing obligation (outside this template). IAS 16 / IFRIC 1 interaction — reading adopted in this course.

IAS 37 §39IAS 37IAS 37 §43IAS 37 §45IAS 37 §47IAS 37 §48IAS 37 §50IAS 37 §51

• Basis of the best estimate

  JudgmentRequired

  Most likely outcome, without adjustment

  Expected value (large population) / Midpoint of a continuous range / Most likely outcome, without adjustment / Most likely outcome adjusted (other outcomes mostly higher or lower)

  Professional judgement (paras. 39 and 40): the basis depends on the nature of the obligation. Adjusting the most likely outcome is a documented judgement; the model does not calculate it.

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Expenditure retained as the best estimate, before discounting

  NumberRequired

  54,000

  Take the result of the basis retained (expected value, midpoint or most likely outcome), adjusted where relevant; the amount of an adjustment is a documented judgement, never set by the standard.

• Discounting and rate retained

  JudgmentRequired

  Pre-tax rate reflecting the risks specific to the liability (cash flows not adjusted for risk)

  Pre-tax rate reflecting the risks specific to the liability (cash flows not adjusted for risk) / Pre-tax rate excluding the risks already reflected in the cash flows / No discounting (effect not material)

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Future events

  JudgmentRequired

  No relevant future event

  Reflected (sufficient objective evidence) / Not reflected (insufficient evidence) / No relevant future event

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Impact by caption, derived from the entries above (the Notes line refers to the disclosures)

  TableRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The basis of the best estimate is documentedPass
• The decision to discount and the rate retained are documentedPass
• The treatment of future events is documentedPass
• The amount of the provision is determinedPass
• The provision is fully split between expense and the cost of an assetNot evaluated
• The provision expense entry is balancedNot evaluated
• The capitalisation entry is balancedPass

Assets

50,000

Liabilities

50,000

Profit or loss

0

OCI

0

Equity

0

• Obligation measured (nature, large population or single obligation, expected timing)

  TextRequired

  CRUSHING_PLANT_DISMANTLING

• Possible outcomes and probabilities (the probabilities sum to 100 %)

  Table

  Case data or management estimate: the outcomes and their probabilities are data, never set by the standard.

• Continuous range of equally likely outcomes: low end + high end

  Number

• Percentage applied to the sum of the ends to obtain the midpoint (50)

  Number

  The midpoint of a range is half the sum of its ends: enter 50.

• Pre-tax discount rate (%)

  Number

  8 %

  Case data: the standard describes the characteristics of the rate (para. 47) without setting a rate.

• Number of periods until the expected outflow (years; 0 if discounting is not material)

  Number

  3 units

  Model assumption: a single outflow at a given date. With 0 periods, the present value equals the expenditure retained; discounting is required only where the effect of the time value of money is material (para. 45).

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IAS 37IAS 37IAS 37IAS 37 §39IAS 37IAS 37IAS 37 §42IAS 37 §43

• Points examined

  ChecklistRequired

  • Amount the entity would rationally pay to settle the obligation at the reporting date or to transfer it to a third party at that date
  • Management judgement, experience of similar transactions, experts' reports, events after the reporting period
  • Large population: expected value (outcomes weighted by their probabilities)
  • Continuous range of equally likely outcomes: midpoint of the range
  • Single obligation: most likely outcome, a higher or lower estimate if the other outcomes are mostly higher or mostly lower
  • Measured before tax (tax consequences under IAS 12)
  • Risks and uncertainties taken into account, without excessive provisions or double counting of risk adjustments

IAS 37 §45IAS 37IAS 37 §47

• Points examined

  ChecklistRequired

  • Effect of the time value of money material: provision at the present value of the expected expenditures
  • Pre-tax rate reflecting current market assessments of the time value of money and the risks specific to the liability
  • Risks already reflected in the estimated cash flows not reflected again in the rate

IAS 37 §48IAS 37 §49IAS 37 §50IAS 37 §51IAS 37 §52

• Points examined

  Checklist

  • Future event reflected only where there is sufficient objective evidence that it will occur
  • Technological change: reasonable expectations of qualified and objective observers; entirely new technology only if supported by objective evidence
  • Possible new legislation: taken into account if its enactment is virtually certain (evidence of its content, its enactment and its implementation)
  • Gains from the expected disposal of assets excluded, even if the disposal is closely linked to the event giving rise to the provision

• Expected disposal gains (amount not included in the provision)

  Number

  35,000

IAS 37 §8IAS 37 §39IAS 37IAS 37 §45IAS 37 §47

• Expected value (Σ amount × probability)

  Calculation

  Possible outcomes and probabilities (the probabilities sum to 100 %)

• Most likely individual outcome (before any adjustment)

  Calculation

  Possible outcomes and probabilities (the probabilities sum to 100 %)

• Midpoint of the range ((low end + high end) × 50 %)

  Calculation

  Continuous range of equally likely outcomes: low end + high end ; Percentage applied to the sum of the ends to obtain the midpoint (50)

• Provision to recognise: present value of the expenditure retained (expenditure / (1 + rate)^n)

  CalculationRequired

  500,000

  Expenditure retained as the best estimate, before discounting ; Pre-tax discount rate (%) ; Number of periods until the expected outflow (years; 0 if discounting is not material)

• Part of the provision recognised as an expense

  Number

• Part included in the cost of an asset where the standard applying to that asset so provides (IAS 16 for property, plant and equipment; IAS 37, para. 8)

  Number

  500,000

• Provision recognised as an expense

  Entry

  Debit Provision expense ← Part of the provision recognised as an expense ; Credit Provision ← Part of the provision recognised as an expense

• Provision included in the cost of an item of property, plant and equipment

  Entry

  Account	Debit	Credit
  Property, plant and equipment	500,000
  Provision		500,000

  Which standard does what. IAS 37: recognition and measurement of the obligation (the provision); IAS 37 neither requires nor prohibits capitalisation, which is left to other standards (para. 8). IAS 16: inclusion of the initial dismantling cost in the cost of the item of property, plant and equipment, when the applicable criteria are met (to be established by the case data). IFRIC 1: subsequent changes in that existing obligation (outside this template). IAS 16 / IFRIC 1 interaction — reading adopted in this course.

IAS 37 §39IAS 37IAS 37 §43IAS 37 §45IAS 37 §47IAS 37 §48IAS 37 §50IAS 37 §51

• Basis of the best estimate

  JudgmentRequired

  Most likely outcome, without adjustment

  Expected value (large population) / Midpoint of a continuous range / Most likely outcome, without adjustment / Most likely outcome adjusted (other outcomes mostly higher or lower)

  Professional judgement (paras. 39 and 40): the basis depends on the nature of the obligation. Adjusting the most likely outcome is a documented judgement; the model does not calculate it.

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Expenditure retained as the best estimate, before discounting

  NumberRequired

  629,856

  Take the result of the basis retained (expected value, midpoint or most likely outcome), adjusted where relevant; the amount of an adjustment is a documented judgement, never set by the standard.

• Discounting and rate retained

  JudgmentRequired

  Pre-tax rate reflecting the risks specific to the liability (cash flows not adjusted for risk)

  Pre-tax rate reflecting the risks specific to the liability (cash flows not adjusted for risk) / Pre-tax rate excluding the risks already reflected in the cash flows / No discounting (effect not material)

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Future events

  JudgmentRequired

  Reflected (sufficient objective evidence)

  Reflected (sufficient objective evidence) / Not reflected (insufficient evidence) / No relevant future event

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Impact by caption, derived from the entries above (the Notes line refers to the disclosures)

  TableRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The basis of the best estimate is documentedPass
• The decision to discount and the rate retained are documentedPass
• The treatment of future events is documentedPass
• The amount of the provision is determinedPass
• The provision is fully split between expense and the cost of an assetNot evaluated
• The provision expense entry is balancedNot evaluated
• The capitalisation entry is balancedPass

Assets

500,000

Liabilities

500,000

Profit or loss

0

OCI

0

Equity

0

• Obligation measured (nature, large population or single obligation, expected timing)

  TextRequired

  CRUSHING_PLANT_DISMANTLING

• Possible outcomes and probabilities (the probabilities sum to 100 %)

  Table

  Case data or management estimate: the outcomes and their probabilities are data, never set by the standard.

• Continuous range of equally likely outcomes: low end + high end

  Number

• Percentage applied to the sum of the ends to obtain the midpoint (50)

  Number

  The midpoint of a range is half the sum of its ends: enter 50.

• Pre-tax discount rate (%)

  Number

  8 %

  Case data: the standard describes the characteristics of the rate (para. 47) without setting a rate.

• Number of periods until the expected outflow (years; 0 if discounting is not material)

  Number

  2 units

  Model assumption: a single outflow at a given date. With 0 periods, the present value equals the expenditure retained; discounting is required only where the effect of the time value of money is material (para. 45).

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IAS 37IAS 37IAS 37IAS 37 §39IAS 37IAS 37IAS 37 §42IAS 37 §43

• Points examined

  ChecklistRequired

  • Amount the entity would rationally pay to settle the obligation at the reporting date or to transfer it to a third party at that date
  • Management judgement, experience of similar transactions, experts' reports, events after the reporting period
  • Large population: expected value (outcomes weighted by their probabilities)
  • Continuous range of equally likely outcomes: midpoint of the range
  • Single obligation: most likely outcome, a higher or lower estimate if the other outcomes are mostly higher or mostly lower
  • Measured before tax (tax consequences under IAS 12)
  • Risks and uncertainties taken into account, without excessive provisions or double counting of risk adjustments

IAS 37 §45IAS 37IAS 37 §47

• Points examined

  ChecklistRequired

  • Effect of the time value of money material: provision at the present value of the expected expenditures
  • Pre-tax rate reflecting current market assessments of the time value of money and the risks specific to the liability
  • Risks already reflected in the estimated cash flows not reflected again in the rate

IAS 37 §48IAS 37 §49IAS 37 §50IAS 37 §51IAS 37 §52

• Points examined

  Checklist

  • Future event reflected only where there is sufficient objective evidence that it will occur
  • Technological change: reasonable expectations of qualified and objective observers; entirely new technology only if supported by objective evidence
  • Possible new legislation: taken into account if its enactment is virtually certain (evidence of its content, its enactment and its implementation)
  • Gains from the expected disposal of assets excluded, even if the disposal is closely linked to the event giving rise to the provision

• Expected disposal gains (amount not included in the provision)

  Number

IAS 37 §8IAS 37 §39IAS 37IAS 37 §45IAS 37 §47

• Expected value (Σ amount × probability)

  Calculation

  Possible outcomes and probabilities (the probabilities sum to 100 %)

• Most likely individual outcome (before any adjustment)

  Calculation

  Possible outcomes and probabilities (the probabilities sum to 100 %)

• Midpoint of the range ((low end + high end) × 50 %)

  Calculation

  Continuous range of equally likely outcomes: low end + high end ; Percentage applied to the sum of the ends to obtain the midpoint (50)

• Provision to recognise: present value of the expenditure retained (expenditure / (1 + rate)^n)

  CalculationRequired

  540,000

  Expenditure retained as the best estimate, before discounting ; Pre-tax discount rate (%) ; Number of periods until the expected outflow (years; 0 if discounting is not material)

• Part of the provision recognised as an expense

  Number

• Part included in the cost of an asset where the standard applying to that asset so provides (IAS 16 for property, plant and equipment; IAS 37, para. 8)

  Number

• Provision recognised as an expense

  Entry

  Debit Provision expense ← Part of the provision recognised as an expense ; Credit Provision ← Part of the provision recognised as an expense

• Provision included in the cost of an item of property, plant and equipment

  Entry

  Debit Property, plant and equipment ← Part included in the cost of an asset where the standard applying to that asset so provides (IAS 16 for property, plant and equipment; IAS 37, para. 8) ; Credit Provision ← Part included in the cost of an asset where the standard applying to that asset so provides (IAS 16 for property, plant and equipment; IAS 37, para. 8)

  Which standard does what. IAS 37: recognition and measurement of the obligation (the provision); IAS 37 neither requires nor prohibits capitalisation, which is left to other standards (para. 8). IAS 16: inclusion of the initial dismantling cost in the cost of the item of property, plant and equipment, when the applicable criteria are met (to be established by the case data). IFRIC 1: subsequent changes in that existing obligation (outside this template). IAS 16 / IFRIC 1 interaction — reading adopted in this course.

IAS 37 §39IAS 37IAS 37 §43IAS 37 §45IAS 37 §47IAS 37 §48IAS 37 §50IAS 37 §51

• Basis of the best estimate

  JudgmentRequired

  Most likely outcome, without adjustment

  Expected value (large population) / Midpoint of a continuous range / Most likely outcome, without adjustment / Most likely outcome adjusted (other outcomes mostly higher or lower)

  Professional judgement (paras. 39 and 40): the basis depends on the nature of the obligation. Adjusting the most likely outcome is a documented judgement; the model does not calculate it.

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Expenditure retained as the best estimate, before discounting

  NumberRequired

  629,856

  Take the result of the basis retained (expected value, midpoint or most likely outcome), adjusted where relevant; the amount of an adjustment is a documented judgement, never set by the standard.

• Discounting and rate retained

  JudgmentRequired

  Pre-tax rate reflecting the risks specific to the liability (cash flows not adjusted for risk)

  Pre-tax rate reflecting the risks specific to the liability (cash flows not adjusted for risk) / Pre-tax rate excluding the risks already reflected in the cash flows / No discounting (effect not material)

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Future events

  JudgmentRequired

  Reflected (sufficient objective evidence)

  Reflected (sufficient objective evidence) / Not reflected (insufficient evidence) / No relevant future event

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Impact by caption, derived from the entries above (the Notes line refers to the disclosures)

  TableRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The basis of the best estimate is documentedPass
• The decision to discount and the rate retained are documentedPass
• The treatment of future events is documentedPass
• The amount of the provision is determinedPass
• The provision is fully split between expense and the cost of an assetNot evaluated
• The provision expense entry is balancedNot evaluated
• The capitalisation entry is balancedNot evaluated

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0

• Obligation measured (nature, large population or single obligation, expected timing)

  TextRequired

  MERQUIN_PUMP_WARRANTIES

• Possible outcomes and probabilities (the probabilities sum to 100 %)

  Table

  NO_CLAIM · NO_REPAIR · 0 · 65 | MINOR · MINOR_DEFECTS · 240,000 · 30 | MAJOR · MAJOR_DEFECTS · 1,300,000 · 5

  Case data or management estimate: the outcomes and their probabilities are data, never set by the standard.

• Continuous range of equally likely outcomes: low end + high end

  Number

• Percentage applied to the sum of the ends to obtain the midpoint (50)

  Number

  The midpoint of a range is half the sum of its ends: enter 50.

• Pre-tax discount rate (%)

  Number

  0 %

  Case data: the standard describes the characteristics of the rate (para. 47) without setting a rate.

• Number of periods until the expected outflow (years; 0 if discounting is not material)

  Number

  0 units

  Model assumption: a single outflow at a given date. With 0 periods, the present value equals the expenditure retained; discounting is required only where the effect of the time value of money is material (para. 45).

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IAS 37IAS 37IAS 37IAS 37 §39IAS 37IAS 37IAS 37 §42IAS 37 §43

• Points examined

  ChecklistRequired

  • Amount the entity would rationally pay to settle the obligation at the reporting date or to transfer it to a third party at that date
  • Management judgement, experience of similar transactions, experts' reports, events after the reporting period
  • Large population: expected value (outcomes weighted by their probabilities)
  • Continuous range of equally likely outcomes: midpoint of the range
  • Single obligation: most likely outcome, a higher or lower estimate if the other outcomes are mostly higher or mostly lower
  • Measured before tax (tax consequences under IAS 12)
  • Risks and uncertainties taken into account, without excessive provisions or double counting of risk adjustments

IAS 37 §45IAS 37IAS 37 §47

• Points examined

  ChecklistRequired

  • Effect of the time value of money material: provision at the present value of the expected expenditures
  • Pre-tax rate reflecting current market assessments of the time value of money and the risks specific to the liability
  • Risks already reflected in the estimated cash flows not reflected again in the rate

IAS 37 §48IAS 37 §49IAS 37 §50IAS 37 §51IAS 37 §52

• Points examined

  Checklist

  • Future event reflected only where there is sufficient objective evidence that it will occur
  • Technological change: reasonable expectations of qualified and objective observers; entirely new technology only if supported by objective evidence
  • Possible new legislation: taken into account if its enactment is virtually certain (evidence of its content, its enactment and its implementation)
  • Gains from the expected disposal of assets excluded, even if the disposal is closely linked to the event giving rise to the provision

• Expected disposal gains (amount not included in the provision)

  Number

IAS 37 §8IAS 37 §39IAS 37IAS 37 §45IAS 37 §47

• Expected value (Σ amount × probability)

  Calculation

  137,000

  Possible outcomes and probabilities (the probabilities sum to 100 %)

• Most likely individual outcome (before any adjustment)

  Calculation

  0

  Possible outcomes and probabilities (the probabilities sum to 100 %)

• Midpoint of the range ((low end + high end) × 50 %)

  Calculation

  Continuous range of equally likely outcomes: low end + high end ; Percentage applied to the sum of the ends to obtain the midpoint (50)

• Provision to recognise: present value of the expenditure retained (expenditure / (1 + rate)^n)

  CalculationRequired

  137,000

  Expenditure retained as the best estimate, before discounting ; Pre-tax discount rate (%) ; Number of periods until the expected outflow (years; 0 if discounting is not material)

• Part of the provision recognised as an expense

  Number

  137,000

• Part included in the cost of an asset where the standard applying to that asset so provides (IAS 16 for property, plant and equipment; IAS 37, para. 8)

  Number

• Provision recognised as an expense

  Entry

  Account	Debit	Credit
  Provision expense	137,000
  Provision		137,000

• Provision included in the cost of an item of property, plant and equipment

  Entry

  Debit Property, plant and equipment ← Part included in the cost of an asset where the standard applying to that asset so provides (IAS 16 for property, plant and equipment; IAS 37, para. 8) ; Credit Provision ← Part included in the cost of an asset where the standard applying to that asset so provides (IAS 16 for property, plant and equipment; IAS 37, para. 8)

  Which standard does what. IAS 37: recognition and measurement of the obligation (the provision); IAS 37 neither requires nor prohibits capitalisation, which is left to other standards (para. 8). IAS 16: inclusion of the initial dismantling cost in the cost of the item of property, plant and equipment, when the applicable criteria are met (to be established by the case data). IFRIC 1: subsequent changes in that existing obligation (outside this template). IAS 16 / IFRIC 1 interaction — reading adopted in this course.

IAS 37 §39IAS 37IAS 37 §43IAS 37 §45IAS 37 §47IAS 37 §48IAS 37 §50IAS 37 §51

• Basis of the best estimate

  JudgmentRequired

  Expected value (large population)

  Expected value (large population) / Midpoint of a continuous range / Most likely outcome, without adjustment / Most likely outcome adjusted (other outcomes mostly higher or lower)

  Professional judgement (paras. 39 and 40): the basis depends on the nature of the obligation. Adjusting the most likely outcome is a documented judgement; the model does not calculate it.

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Expenditure retained as the best estimate, before discounting

  NumberRequired

  137,000

  Take the result of the basis retained (expected value, midpoint or most likely outcome), adjusted where relevant; the amount of an adjustment is a documented judgement, never set by the standard.

• Discounting and rate retained

  JudgmentRequired

  No discounting (effect not material)

  Pre-tax rate reflecting the risks specific to the liability (cash flows not adjusted for risk) / Pre-tax rate excluding the risks already reflected in the cash flows / No discounting (effect not material)

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Future events

  JudgmentRequired

  No relevant future event

  Reflected (sufficient objective evidence) / Not reflected (insufficient evidence) / No relevant future event

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Impact by caption, derived from the entries above (the Notes line refers to the disclosures)

  TableRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The basis of the best estimate is documentedPass
• The decision to discount and the rate retained are documentedPass
• The treatment of future events is documentedPass
• The amount of the provision is determinedPass
• The provision is fully split between expense and the cost of an assetNot evaluated
• The provision expense entry is balancedPass
• The capitalisation entry is balancedNot evaluated

Assets

0

Liabilities

137,000

Profit or loss

-137,000

OCI

0

Equity

-137,000

• Obligation measured (nature, large population or single obligation, expected timing)

  TextRequired

  CORVELLA_CROP_LOSS_CLAIM

• Possible outcomes and probabilities (the probabilities sum to 100 %)

  Table

  SETTLEMENT · NEGOTIATED_SETTLEMENT · 420,000 · 60 | AWARD · PARTIAL_AWARD · 700,000 · 30 | FULL_CLAIM · FULL_CLAIM_AWARDED · 900,000 · 10

  Case data or management estimate: the outcomes and their probabilities are data, never set by the standard.

• Continuous range of equally likely outcomes: low end + high end

  Number

• Percentage applied to the sum of the ends to obtain the midpoint (50)

  Number

  The midpoint of a range is half the sum of its ends: enter 50.

• Pre-tax discount rate (%)

  Number

  0 %

  Case data: the standard describes the characteristics of the rate (para. 47) without setting a rate.

• Number of periods until the expected outflow (years; 0 if discounting is not material)

  Number

  0 units

  Model assumption: a single outflow at a given date. With 0 periods, the present value equals the expenditure retained; discounting is required only where the effect of the time value of money is material (para. 45).

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IAS 37IAS 37IAS 37IAS 37 §39IAS 37IAS 37IAS 37 §42IAS 37 §43

• Points examined

  ChecklistRequired

  • Amount the entity would rationally pay to settle the obligation at the reporting date or to transfer it to a third party at that date
  • Management judgement, experience of similar transactions, experts' reports, events after the reporting period
  • Large population: expected value (outcomes weighted by their probabilities)
  • Continuous range of equally likely outcomes: midpoint of the range
  • Single obligation: most likely outcome, a higher or lower estimate if the other outcomes are mostly higher or mostly lower
  • Measured before tax (tax consequences under IAS 12)
  • Risks and uncertainties taken into account, without excessive provisions or double counting of risk adjustments

IAS 37 §45IAS 37IAS 37 §47

• Points examined

  ChecklistRequired

  • Effect of the time value of money material: provision at the present value of the expected expenditures
  • Pre-tax rate reflecting current market assessments of the time value of money and the risks specific to the liability
  • Risks already reflected in the estimated cash flows not reflected again in the rate

IAS 37 §48IAS 37 §49IAS 37 §50IAS 37 §51IAS 37 §52

• Points examined

  Checklist

  • Future event reflected only where there is sufficient objective evidence that it will occur
  • Technological change: reasonable expectations of qualified and objective observers; entirely new technology only if supported by objective evidence
  • Possible new legislation: taken into account if its enactment is virtually certain (evidence of its content, its enactment and its implementation)
  • Gains from the expected disposal of assets excluded, even if the disposal is closely linked to the event giving rise to the provision

• Expected disposal gains (amount not included in the provision)

  Number

IAS 37 §8IAS 37 §39IAS 37IAS 37 §45IAS 37 §47

• Expected value (Σ amount × probability)

  Calculation

  552,000

  Possible outcomes and probabilities (the probabilities sum to 100 %)

• Most likely individual outcome (before any adjustment)

  Calculation

  420,000

  Possible outcomes and probabilities (the probabilities sum to 100 %)

• Midpoint of the range ((low end + high end) × 50 %)

  Calculation

  Continuous range of equally likely outcomes: low end + high end ; Percentage applied to the sum of the ends to obtain the midpoint (50)

• Provision to recognise: present value of the expenditure retained (expenditure / (1 + rate)^n)

  CalculationRequired

  500,000

  Expenditure retained as the best estimate, before discounting ; Pre-tax discount rate (%) ; Number of periods until the expected outflow (years; 0 if discounting is not material)

• Part of the provision recognised as an expense

  Number

  500,000

• Part included in the cost of an asset where the standard applying to that asset so provides (IAS 16 for property, plant and equipment; IAS 37, para. 8)

  Number

• Provision recognised as an expense

  Entry

  Account	Debit	Credit
  Provision expense	500,000
  Provision		500,000

• Provision included in the cost of an item of property, plant and equipment

  Entry

  Debit Property, plant and equipment ← Part included in the cost of an asset where the standard applying to that asset so provides (IAS 16 for property, plant and equipment; IAS 37, para. 8) ; Credit Provision ← Part included in the cost of an asset where the standard applying to that asset so provides (IAS 16 for property, plant and equipment; IAS 37, para. 8)

  Which standard does what. IAS 37: recognition and measurement of the obligation (the provision); IAS 37 neither requires nor prohibits capitalisation, which is left to other standards (para. 8). IAS 16: inclusion of the initial dismantling cost in the cost of the item of property, plant and equipment, when the applicable criteria are met (to be established by the case data). IFRIC 1: subsequent changes in that existing obligation (outside this template). IAS 16 / IFRIC 1 interaction — reading adopted in this course.

IAS 37 §39IAS 37IAS 37 §43IAS 37 §45IAS 37 §47IAS 37 §48IAS 37 §50IAS 37 §51

• Basis of the best estimate

  JudgmentRequired

  Most likely outcome adjusted (other outcomes mostly higher or lower)

  Expected value (large population) / Midpoint of a continuous range / Most likely outcome, without adjustment / Most likely outcome adjusted (other outcomes mostly higher or lower)

  Professional judgement (paras. 39 and 40): the basis depends on the nature of the obligation. Adjusting the most likely outcome is a documented judgement; the model does not calculate it.

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Expenditure retained as the best estimate, before discounting

  NumberRequired

  500,000

  Take the result of the basis retained (expected value, midpoint or most likely outcome), adjusted where relevant; the amount of an adjustment is a documented judgement, never set by the standard.

• Discounting and rate retained

  JudgmentRequired

  No discounting (effect not material)

  Pre-tax rate reflecting the risks specific to the liability (cash flows not adjusted for risk) / Pre-tax rate excluding the risks already reflected in the cash flows / No discounting (effect not material)

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Future events

  JudgmentRequired

  No relevant future event

  Reflected (sufficient objective evidence) / Not reflected (insufficient evidence) / No relevant future event

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Impact by caption, derived from the entries above (the Notes line refers to the disclosures)

  TableRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The basis of the best estimate is documentedPass
• The decision to discount and the rate retained are documentedPass
• The treatment of future events is documentedPass
• The amount of the provision is determinedPass
• The provision is fully split between expense and the cost of an assetNot evaluated
• The provision expense entry is balancedPass
• The capitalisation entry is balancedNot evaluated

Assets

0

Liabilities

500,000

Profit or loss

-500,000

OCI

0

Equity

-500,000

• Obligation measured (nature, large population or single obligation, expected timing)

  TextRequired

  QUESSANDRE_SITE_DECONTAMINATION

• Possible outcomes and probabilities (the probabilities sum to 100 %)

  Table

  Case data or management estimate: the outcomes and their probabilities are data, never set by the standard.

• Continuous range of equally likely outcomes: low end + high end

  Number

• Percentage applied to the sum of the ends to obtain the midpoint (50)

  Number

  The midpoint of a range is half the sum of its ends: enter 50.

• Pre-tax discount rate (%)

  Number

  4 %

  Case data: the standard describes the characteristics of the rate (para. 47) without setting a rate.

• Number of periods until the expected outflow (years; 0 if discounting is not material)

  Number

  1 units

  Model assumption: a single outflow at a given date. With 0 periods, the present value equals the expenditure retained; discounting is required only where the effect of the time value of money is material (para. 45).

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IAS 37IAS 37IAS 37IAS 37 §39IAS 37IAS 37IAS 37 §42IAS 37 §43

• Points examined

  ChecklistRequired

  • Amount the entity would rationally pay to settle the obligation at the reporting date or to transfer it to a third party at that date
  • Management judgement, experience of similar transactions, experts' reports, events after the reporting period
  • Large population: expected value (outcomes weighted by their probabilities)
  • Continuous range of equally likely outcomes: midpoint of the range
  • Single obligation: most likely outcome, a higher or lower estimate if the other outcomes are mostly higher or mostly lower
  • Measured before tax (tax consequences under IAS 12)
  • Risks and uncertainties taken into account, without excessive provisions or double counting of risk adjustments

IAS 37 §45IAS 37IAS 37 §47

• Points examined

  ChecklistRequired

  • Effect of the time value of money material: provision at the present value of the expected expenditures
  • Pre-tax rate reflecting current market assessments of the time value of money and the risks specific to the liability
  • Risks already reflected in the estimated cash flows not reflected again in the rate

IAS 37 §48IAS 37 §49IAS 37 §50IAS 37 §51IAS 37 §52

• Points examined

  Checklist

  • Future event reflected only where there is sufficient objective evidence that it will occur
  • Technological change: reasonable expectations of qualified and objective observers; entirely new technology only if supported by objective evidence
  • Possible new legislation: taken into account if its enactment is virtually certain (evidence of its content, its enactment and its implementation)
  • Gains from the expected disposal of assets excluded, even if the disposal is closely linked to the event giving rise to the provision

• Expected disposal gains (amount not included in the provision)

  Number

IAS 37 §8IAS 37 §39IAS 37IAS 37 §45IAS 37 §47

• Expected value (Σ amount × probability)

  Calculation

  Possible outcomes and probabilities (the probabilities sum to 100 %)

• Most likely individual outcome (before any adjustment)

  Calculation

  Possible outcomes and probabilities (the probabilities sum to 100 %)

• Midpoint of the range ((low end + high end) × 50 %)

  Calculation

  Continuous range of equally likely outcomes: low end + high end ; Percentage applied to the sum of the ends to obtain the midpoint (50)

• Provision to recognise: present value of the expenditure retained (expenditure / (1 + rate)^n)

  CalculationRequired

  750,000

  Expenditure retained as the best estimate, before discounting ; Pre-tax discount rate (%) ; Number of periods until the expected outflow (years; 0 if discounting is not material)

• Part of the provision recognised as an expense

  Number

  750,000

• Part included in the cost of an asset where the standard applying to that asset so provides (IAS 16 for property, plant and equipment; IAS 37, para. 8)

  Number

• Provision recognised as an expense

  Entry

  Account	Debit	Credit
  Provision expense	750,000
  Provision		750,000

• Provision included in the cost of an item of property, plant and equipment

  Entry

  Debit Property, plant and equipment ← Part included in the cost of an asset where the standard applying to that asset so provides (IAS 16 for property, plant and equipment; IAS 37, para. 8) ; Credit Provision ← Part included in the cost of an asset where the standard applying to that asset so provides (IAS 16 for property, plant and equipment; IAS 37, para. 8)

  Which standard does what. IAS 37: recognition and measurement of the obligation (the provision); IAS 37 neither requires nor prohibits capitalisation, which is left to other standards (para. 8). IAS 16: inclusion of the initial dismantling cost in the cost of the item of property, plant and equipment, when the applicable criteria are met (to be established by the case data). IFRIC 1: subsequent changes in that existing obligation (outside this template). IAS 16 / IFRIC 1 interaction — reading adopted in this course.

IAS 37 §39IAS 37IAS 37 §43IAS 37 §45IAS 37 §47IAS 37 §48IAS 37 §50IAS 37 §51

• Basis of the best estimate

  JudgmentRequired

  Most likely outcome, without adjustment

  Expected value (large population) / Midpoint of a continuous range / Most likely outcome, without adjustment / Most likely outcome adjusted (other outcomes mostly higher or lower)

  Professional judgement (paras. 39 and 40): the basis depends on the nature of the obligation. Adjusting the most likely outcome is a documented judgement; the model does not calculate it.

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Expenditure retained as the best estimate, before discounting

  NumberRequired

  780,000

  Take the result of the basis retained (expected value, midpoint or most likely outcome), adjusted where relevant; the amount of an adjustment is a documented judgement, never set by the standard.

• Discounting and rate retained

  JudgmentRequired

  Pre-tax rate reflecting the risks specific to the liability (cash flows not adjusted for risk)

  Pre-tax rate reflecting the risks specific to the liability (cash flows not adjusted for risk) / Pre-tax rate excluding the risks already reflected in the cash flows / No discounting (effect not material)

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Future events

  JudgmentRequired

  No relevant future event

  Reflected (sufficient objective evidence) / Not reflected (insufficient evidence) / No relevant future event

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Impact by caption, derived from the entries above (the Notes line refers to the disclosures)

  TableRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The basis of the best estimate is documentedPass
• The decision to discount and the rate retained are documentedPass
• The treatment of future events is documentedPass
• The amount of the provision is determinedPass
• The provision is fully split between expense and the cost of an assetNot evaluated
• The provision expense entry is balancedPass
• The capitalisation entry is balancedNot evaluated

Assets

0

Liabilities

750,000

Profit or loss

-750,000

OCI

0

Equity

-750,000

• Obligation measured (nature, large population or single obligation, expected timing)

  TextRequired

  VELLMONT_SOIL_REMEDIATION

• Possible outcomes and probabilities (the probabilities sum to 100 %)

  Table

  Case data or management estimate: the outcomes and their probabilities are data, never set by the standard.

• Continuous range of equally likely outcomes: low end + high end

  Number

• Percentage applied to the sum of the ends to obtain the midpoint (50)

  Number

  The midpoint of a range is half the sum of its ends: enter 50.

• Pre-tax discount rate (%)

  Number

  5 %

  Case data: the standard describes the characteristics of the rate (para. 47) without setting a rate.

• Number of periods until the expected outflow (years; 0 if discounting is not material)

  Number

  3 units

  Model assumption: a single outflow at a given date. With 0 periods, the present value equals the expenditure retained; discounting is required only where the effect of the time value of money is material (para. 45).

• Evidence obtained and referenced (category, document reference)

  EvidenceRequired

IAS 37IAS 37IAS 37IAS 37 §39IAS 37IAS 37IAS 37 §42IAS 37 §43

• Points examined

  ChecklistRequired

  • Amount the entity would rationally pay to settle the obligation at the reporting date or to transfer it to a third party at that date
  • Management judgement, experience of similar transactions, experts' reports, events after the reporting period
  • Large population: expected value (outcomes weighted by their probabilities)
  • Continuous range of equally likely outcomes: midpoint of the range
  • Single obligation: most likely outcome, a higher or lower estimate if the other outcomes are mostly higher or mostly lower
  • Measured before tax (tax consequences under IAS 12)
  • Risks and uncertainties taken into account, without excessive provisions or double counting of risk adjustments

IAS 37 §45IAS 37IAS 37 §47

• Points examined

  ChecklistRequired

  • Effect of the time value of money material: provision at the present value of the expected expenditures
  • Pre-tax rate reflecting current market assessments of the time value of money and the risks specific to the liability
  • Risks already reflected in the estimated cash flows not reflected again in the rate

IAS 37 §48IAS 37 §49IAS 37 §50IAS 37 §51IAS 37 §52

• Points examined

  Checklist

  • Future event reflected only where there is sufficient objective evidence that it will occur
  • Technological change: reasonable expectations of qualified and objective observers; entirely new technology only if supported by objective evidence
  • Possible new legislation: taken into account if its enactment is virtually certain (evidence of its content, its enactment and its implementation)
  • Gains from the expected disposal of assets excluded, even if the disposal is closely linked to the event giving rise to the provision

• Expected disposal gains (amount not included in the provision)

  Number

IAS 37 §8IAS 37 §39IAS 37IAS 37 §45IAS 37 §47

• Expected value (Σ amount × probability)

  Calculation

  Possible outcomes and probabilities (the probabilities sum to 100 %)

• Most likely individual outcome (before any adjustment)

  Calculation

  Possible outcomes and probabilities (the probabilities sum to 100 %)

• Midpoint of the range ((low end + high end) × 50 %)

  Calculation

  Continuous range of equally likely outcomes: low end + high end ; Percentage applied to the sum of the ends to obtain the midpoint (50)

• Provision to recognise: present value of the expenditure retained (expenditure / (1 + rate)^n)

  CalculationRequired

  1,800,000

  Expenditure retained as the best estimate, before discounting ; Pre-tax discount rate (%) ; Number of periods until the expected outflow (years; 0 if discounting is not material)

• Part of the provision recognised as an expense

  Number

• Part included in the cost of an asset where the standard applying to that asset so provides (IAS 16 for property, plant and equipment; IAS 37, para. 8)

  Number

• Provision recognised as an expense

  Entry

  Debit Provision expense ← Part of the provision recognised as an expense ; Credit Provision ← Part of the provision recognised as an expense

• Provision included in the cost of an item of property, plant and equipment

  Entry

  Debit Property, plant and equipment ← Part included in the cost of an asset where the standard applying to that asset so provides (IAS 16 for property, plant and equipment; IAS 37, para. 8) ; Credit Provision ← Part included in the cost of an asset where the standard applying to that asset so provides (IAS 16 for property, plant and equipment; IAS 37, para. 8)

  Which standard does what. IAS 37: recognition and measurement of the obligation (the provision); IAS 37 neither requires nor prohibits capitalisation, which is left to other standards (para. 8). IAS 16: inclusion of the initial dismantling cost in the cost of the item of property, plant and equipment, when the applicable criteria are met (to be established by the case data). IFRIC 1: subsequent changes in that existing obligation (outside this template). IAS 16 / IFRIC 1 interaction — reading adopted in this course.

IAS 37 §39IAS 37IAS 37 §43IAS 37 §45IAS 37 §47IAS 37 §48IAS 37 §50IAS 37 §51

• Basis of the best estimate

  JudgmentRequired

  Most likely outcome, without adjustment

  Expected value (large population) / Midpoint of a continuous range / Most likely outcome, without adjustment / Most likely outcome adjusted (other outcomes mostly higher or lower)

  Professional judgement (paras. 39 and 40): the basis depends on the nature of the obligation. Adjusting the most likely outcome is a documented judgement; the model does not calculate it.

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Expenditure retained as the best estimate, before discounting

  NumberRequired

  2,083,725

  Take the result of the basis retained (expected value, midpoint or most likely outcome), adjusted where relevant; the amount of an adjustment is a documented judgement, never set by the standard.

• Discounting and rate retained

  JudgmentRequired

  Pre-tax rate reflecting the risks specific to the liability (cash flows not adjusted for risk)

  Pre-tax rate reflecting the risks specific to the liability (cash flows not adjusted for risk) / Pre-tax rate excluding the risks already reflected in the cash flows / No discounting (effect not material)

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Future events

  JudgmentRequired

  No relevant future event

  Reflected (sufficient objective evidence) / Not reflected (insufficient evidence) / No relevant future event

• Rationale: facts relied on, analysis, alternative rejected

  TextRequired

• Impact by caption, derived from the entries above (the Notes line refers to the disclosures)

  TableRequired

• Paragraphs cited in this workpaper (verification status shown from the register)

  References

• The basis of the best estimate is documentedPass
• The decision to discount and the rate retained are documentedPass
• The treatment of future events is documentedPass
• The amount of the provision is determinedPass
• The provision is fully split between expense and the cost of an assetNot evaluated
• The provision expense entry is balancedNot evaluated
• The capitalisation entry is balancedNot evaluated

Assets

0

Liabilities

0

Profit or loss

0

OCI

0

Equity

0