Q1 (a) What attributes should an item or transaction exhibit in order to be classified as a liability? (b) Define ‘Provisions’ as per AASB 137 with specific focus on the rules for measurement of Provisions.

Q1 (a) What attributes should an item or transaction exhibit in order to be classified as a liability? (b) Define ‘Provisions’ as per AASB 137 with specific focus on the rules for measurement of Provisions.

Business/Professional Ethics Directors/Executives/Acct

8th Edition

ISBN:9781337485913

Author:BROOKS

Publisher:BROOKS

Chapter5: Corporate Ethical Governance & Accountabililty

Section: Chapter Questions

Problem 15.2EC

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Concept explainers

Contingent Liabilities and Provisions

A contingent liability can be defined as a liability the occurrence of which is dependent upon the happening of an uncertain future event. It is generally recorded in the books only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly.

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Q1
(a) What attributes should an item or transaction exhibit in order to be classified as a liability?
(b) Define ‘Provisions’ as per AASB 137 with specific focus on the rules for measurement of Provisions.

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Accounting for Current liabilities, Provisions and Contingencies

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