ACCT 4120 - IAS 37 Contingent Liabilities

TRUE OR FALSE

IAS 37 does not apply to financial instruments (including guarantees) that are within the scope of IFRS 9 - Financial Instruments

• True

• False

TRUE OR FALSE

In some countries the term "provision" is also used in the context of items such as; depreciation, impairment of assets and doubtful debts

• True

• False

TRUE OR FALSE

An entity shall recognize a contingent asset

• True

• False

TRUE OR FALSE

Where there is an inflow of economic benefits that are likely but not probable, an entity shall disclose a brief description of the nature of the contingent asset at the end of the reporting period

• True

• False

A legal obligation is an obligation that derives from:

• a written agreement, a document, from the law

• a verbal agreement, legislation, a contract

• a contract, legislation, other operation of law

• a contractual right, a written agreement, a right

A provision should be recognized when:

• Estimate is made and there is evidence readily available

• After the event has been follow through and there is a liability present

• Reliable estimate can be made can be made, present obligation fro a past event, and outflow that will be required to settle

• None of the above

How is a provision recognized?

• Legal costs

• All costs associated with the provision up to date

• Best estimate

• All of the above

In the ____ the expense relating to a provision may be presented net of the amount recognized for reimbursement

• Income statement

• Balance sheet

• Statement of equity

• Statement of comprehensive income

When should a provision be reviewed?

• Every 6 months

• Yearly basis

• At the end of each reporting period

• Monthly

How many disclosure requirements are there for each class of provision?

• 8

• 5

• 3

• 2