Constructive obligation: Difference between revisions
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imported>Doug Williamson (Create page - source - IASplus - https://www.iasplus.com/en/standards/ias/ias37) |
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Under IAS 37, a ''constructive obligation'' arises if past practice creates a valid expectation on the part of a third party, for example, a retail store that has a long-standing policy of allowing customers to return merchandise within, say, a 30-day period. | Under IAS 37, a ''constructive obligation'' arises if past practice creates a valid expectation on the part of a third party, for example, a retail store that has a long-standing policy of allowing customers to return merchandise within, say, a 30-day period. | ||
In turn, an event that creates a constructive obligation can be an ''obligating event''. | |||
In turn, an event that creates a constructive obligation can be an ''obligating event'' under IAS 37. | |||
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* [[International Financial Reporting Standards]] | * [[International Financial Reporting Standards]] | ||
* [[Obligating event]] | * [[Obligating event]] | ||
* [[Obligation]] | |||
* [[Provision]] | * [[Provision]] | ||
[[Category:Accounting,_tax_and_regulation]] | [[Category:Accounting,_tax_and_regulation]] | ||
Latest revision as of 00:04, 20 January 2022
Financial reporting - provisions - contingent liabilities - International Accounting Standards - IAS 37.
IAS 37 deals with provisions, contingent liabilities and contingent assets.
Under IAS 37, a constructive obligation arises if past practice creates a valid expectation on the part of a third party, for example, a retail store that has a long-standing policy of allowing customers to return merchandise within, say, a 30-day period.
In turn, an event that creates a constructive obligation can be an obligating event under IAS 37.
