Provision: Difference between revisions
imported>Doug Williamson (Expand first definition - source - IAS 37 - https://www.iasplus.com/en/standards/ias/ias37) |
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== See also == | == See also == | ||
* [[Accrual]] | * [[Accrual]] | ||
* [[Accrued expense]] | |||
* [[Anti-avoidance provision]] | * [[Anti-avoidance provision]] | ||
* [[Bad debt provision]] | * [[Bad debt provision]] | ||
| Line 50: | Line 51: | ||
* [[Carrying amount]] | * [[Carrying amount]] | ||
* [[Constructive obligation]] | * [[Constructive obligation]] | ||
* [[Contingent | * [[Contingent liabilities]] | ||
* [[Contract]] | * [[Contract]] | ||
* [[Deficit]] | * [[Deficit]] | ||
| Line 59: | Line 60: | ||
* [[IAS 37]] | * [[IAS 37]] | ||
* [[Liabilities]] | * [[Liabilities]] | ||
* [[Loan loss reserve]] (LLR) | |||
* [[Make whole provision]] | * [[Make whole provision]] | ||
* [[Net book value]] | * [[Net book value]] | ||
* [[Obligating event]] | * [[Obligating event]] | ||
* [[Pension liabilities]] | |||
* [[Provision for depreciation]] | |||
* [[Provision of information]] | |||
* [[Provisional credit]] | |||
* [[Provisional transfer]] | |||
* [[Prudence]] | * [[Prudence]] | ||
* [[Recognition]] | * [[Recognition]] | ||
* [[Reserve]] | * [[Reserve]] | ||
* [[Term]] | * [[Term]] | ||
* [[Use-of-proceeds provision]] | |||
* [[Zero rate provision]] | * [[Zero rate provision]] | ||
[[Category:Accounting,_tax_and_regulation]] | [[Category:Accounting,_tax_and_regulation]] | ||
[[Category:Compliance_and_audit]] | [[Category:Compliance_and_audit]] | ||
Latest revision as of 19:27, 3 October 2023
1. Financial reporting - balance sheet - liabilities.
A form of liability where there is uncertainty as to the amount and timing of final settlement.
Relevant accounting standards include IAS 37 and Section 21 of FRS 102.
Under IAS 37, an entity must recognise a provision in its balance sheet if - and only if:
- A present obligation (legal or constructive) has arisen as a result of a past event (the obligating event), and
- Payment is probable ('more likely than not'), and
- The amount can be estimated reliably.
Under IAS 37, items that fall short of these criteria may be possible obligations.
Possible obligations are contingent liabilities for accounting purposes under IAS 37, disclosed but not accrued / recognised.
2. Accounting - noun.
A reduction in the carrying amount, or net book value, of an asset to recognise an estimated reduction in value.
Examples include bad debt provisions and provisions for depreciation.
3. Accounting - verb.
To create an accounting provision, or increase the amount of a provision.
4. Law.
A significant individual part of a law, for example a tax anti-avoidance provision.
5. Contract law.
A significant individual part of a contract, for example a clause or a term in a contract.
See also
- Accrual
- Accrued expense
- Anti-avoidance provision
- Bad debt provision
- Balance sheet
- Big bath
- Book reserve
- Call provision
- Carrying amount
- Constructive obligation
- Contingent liabilities
- Contract
- Deficit
- Depreciation
- Disclosure
- FRS 102
- General provision
- IAS 37
- Liabilities
- Loan loss reserve (LLR)
- Make whole provision
- Net book value
- Obligating event
- Pension liabilities
- Provision for depreciation
- Provision of information
- Provisional credit
- Provisional transfer
- Prudence
- Recognition
- Reserve
- Term
- Use-of-proceeds provision
- Zero rate provision
