Disclosures as per Ind AS 37

For Provisions

  • For each class of provision, an entity shall disclose
  • the carrying amount at the beginning and end of the period
  • additional provisions made in the period, including increases to existing provisions
  • amounts used (ie incurred and charged against the provision) during the period
  • unused amounts reversed during the period; and
  • the increase during the period in the discounted amount arising from the passage of time and the effect of any change in the discount rate
  • An entity shall disclose the following for each class of provision
  • a brief description of the nature of the obligation and the expected timing of any resulting outflows of economic benefits
  • an indication of the uncertainties about the amount or timing of those outflows. Where necessary to provide adequate information, an entity shall disclose the major assumptions made concerning future events, and
  • the amount of any expected reimbursement, stating the amount of any asset that has been recognized for that expected reimbursement

For Contingent Liability

  • Unless the possibility of any outflow in settlement is remote, an entity shall disclose for each class of contingent liability at the end of the reporting period a brief description of the nature of the contingent liability and, where practicable
  • an estimate of its financial effect
  • an indication of the uncertainties relating to the amount or timing of any outflow; and
  • the possibility of any reimbursement

For Contingent Asset

  • Where an inflow of economic benefits is probable, an entity shall disclose a brief description of the nature of the contingent assets at the end of the reporting period, and, where practicable, an estimate of their financial effect, measured using the principles set out for provisions in paragraphs 36–52 of Ind AS 37.

Provisions – Ind AS 37

Provisions as per Ind AS 37 What is a Provision? Provision is a liability of uncertain timing or amount The word “uncertain” is very important here, because if timing and amount are certain or almost certain, then you don’t deal with the provision but with a payable or an accrual To understand provisions better, let’s break down …
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Contingent Liability & Contingent Asset – Ind AS 37

Contingent Liability & Contingent Asset – Ind AS 37 What is a contingent liability? A contingent liability isa 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 events not wholly within the control of the entity; …
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Measurement of Provision – Ind AS 37

Measurement of Provision – Ind AS 37 The amount of the provision should be measured at the best estimate of the expenditures required to satisfy the obligation at the end of the reporting periodAs you can see, here’s some judgment and estimates involved. Management should really incorporate all available information in their estimates, …
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Change in Provisions and Use of Provisions – Ind AS 37

Change in Provisions and Use of Provisions – Ind AS 37 Change in Provisions Provisions shall be reviewed at the end of each reporting period and adjusted to reflect the current best estimateIf it is no longer probable that an outflow of resources embodying economic benefits will be required to settle the …
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Appendix to Ind AS 37

Appendix to Ind AS 37 Appendix A Rights to Interests arising from Decommissioning, Restoration and Environmental Rehabilitation Funds The purpose of decommissioning, restoration and environmental rehabilitation funds, hereafter referred to as ‘decommissioning funds’ or ‘funds’, is to segregate assets to fund some or all of the costs of decommissioning plant (such as a …
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Impact of COVID 19 on Ind AS 37

Impact of COVID 19 on Ind AS 37 Onerous Contract Onerous contracts are those contracts for which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. Unavoidable costs under a contract are the least net cost of exiting from the contract, …
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