(T/F) PAS 37: Provision, Contingent Liabilities, & Contingent Asssets

PAS 37 prescribe the accounting and disclosure requirements for provisions, contingent liabilities, and contingent assets to help users understand their nature, timing, and amount.

True

PAS 37 applies to those arising from executory contracts.

False

Those arising from executory contracts that have become onerous is covered by PAS 37.

True

Executory contracts are contracts that are fully executed, meaning, the parties thereto have no obligations to perform

False

not yet fully executed, meaning, parties have still obligations to perform.

A contract becomes onerous when the cost of fulfilling it exceeds the economic benefits expected to be derived from it.

True

A provision is a liability of certain timing or amount.

False

uncertain not certain

Provisions differ from trade payables and accruals because of the certainty in the timing of their settlement.

False

uncertainty not certainty

Unlike other liabilities, provisions must not be necessarily be estimated.

False

must be necessarily be estimated

Provisions are presented in the statement of financial position separately from other types of liabilities.

True

In recognition criteria, provision is recognized either of the following conditions:

a) present obligation from past event.

b) probable outflow of resources to settles the obligations

c) estimated amount is reliable

False

all conditions are needed for a provision to be recognized.

An entity deems a past event to give rise to a present obligation if available evidence shows that it is more likely than not that a present obligation exists after the end of the reporting period.

False

not after the end of reporting period, but 'at the end of the reporting period.

A past event that creates a present obligation is called an obligating event.

True

An obligating event is one whereby the entity does not have any other alternative or recourse but to settle an obligation.

True

A present obligation can only be legally enforceable.

False

legally enforceable or from constructive obligation

An obligation that is legally enforceable derives from the a contract, legislation, or other operation of law.

True