1. CONTINGENCIES AND PROVISIONING
IAS 37 DEFINITIONS
Term Para Description
Reference
to IAS 37
Contingent 10 It is:
Liability
(a) a possible obligation that arises from past events
and whose existence will be confirmed only by the
occurrence or non- occurrence of one or more
uncertain future not wholly within the control of the
enterprise
(b) a present obligation that arises from past events
but not recognised because (i) it is not probable
that an outflow of resources embodying economic
benefit take place and (ii) the amount of obligation
cannot be measured reliably.
Contingent 10 It is possible asset that arises from past events and whose
Asset existence will be confirmed only by the occurrence or non-
occurrence of one or more uncertain future event not
wholly within the control of the enterprise.
Provision 10 It is a liability of uncertain timing and amount.
Liability 10 It is a present obligation of the enterprise arising from past
events, settlement of which is expected to have outflow of
resources embodying economic benefit.
Legal 10 That derives from contract, legislation and other operation
obligation of law.
Constructive 10 That derives from enterprise’s action.
obligation
An enterprise by a statement may indicate its acceptance
of an obligation.
An enterprise has shown its acceptance of certain type of
obligation by past practice.
Onerous 10 A contract in which unavoidable cost exceed the economic
contract benefit to be received under it.
Restructuring 10 A restructuring is a program that is planned and controlled
by management, and materially changes either:
a. the scope of a business undertaken by an entity;
b. the manner in which that business is conducted.