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Appendix 1 Compliance with International Accounting Standards As at the date of issue of this Standard, compliance with this Standard will ensure conformity in all material respects with International Accounting Standard IAS 37, Provisions, Contingent Liabilities and Contingent Assets. Appendix 2 Tables-Provisions, Contingent Liabilities, Contingent Assets and Reimbursements The purpose of this appendix is to summarise the main requirements of the standards. It does not form part of the standards and should be read in the context of the full text of the standards. Provisions and Contingent Liabilities Where, as a result of past events, there may be an outflow of resources embodying future economic benefits in settlement of: (a) a present obligation; or (b) a possible obligation whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise. | There is a present obligation that probably requires an outflow of resources. | There is possible obligation or a present obligation that may, but probably will not require an outflow of resources. | There is a possible obligation or a present obligation where the likelihood of an outflow of resources is remote. | A provision is recognised (paragraph 15). Disclosures are required for the provision (paragraph 85 and 86). | No provision is recognised (paragraph 28). Disclosures are required for the contingent liability (paragraph 87). | No provision is recognised (paragraph 28). No disclosure is required (paragraph 87). |
A contingent liability also arises in the extremely rare case where there is a liability that cannot be recognised because it cannot be measured reliably. Disclosures are required for the contingent liability. Contingent Assets Where, as a result of past events, there is a possible asset whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise. | The inflow of economic benefits is virtually certain. | The inflow of economic benefits is probable, but not virtually certain. | The inflow is not probable. | The asset is not contingent (paragraph 34). | No asset is recognised (paragraph 32).
Disclosures are required (paragraph 90). | No asset is recognised (paragraph 32). No disclosure is required (paragraph 90). |
Reimbursements Some or all of the expenditure required to settle a provision is expected to be reimbursed by another party. | The enterprise has no obligation for the part of the expenditure to be reimbursed by the other party. | The obligation for the amount expected to be reimbursed remains with the enterprise and it is virtually certain that reimbursement will be received if the enterprise settles the provision. | The obligation for the amount expected to be reimbursed remains with the enterprise and the reimbursement is not virtually certain if the enterprise settles the provision. | The entity has no liability for the amount to be reimbursed (paragraph 58).
No disclosure is required. | The reimbursement is recognised as a separate asset in the balance sheet and may be offset against the expense in the income statement. The amount recognised for the expected reimbursement does not exceed the liability (paragraphs 54 and 55). The reimbursement is disclosed together with the amount recognised for the reimbursement [86(c)] | The expected reimbursement is not recognised as an asset (paragraph 54).
The expected reimbursement is disclosed [paragraph 86(c)]. |
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