3 conditions that must be satisfied for provision to be recognized under IAS 37.

A provision  is a liability of uncertain timing or amount.

A provision should be recognized when and only when:

  • an entity has present obligation (legal or constructive) as result of past events
  • it is probable (i.e more likely than not) that an outflow of resources embodying economic benefits will be required to settle the obligations; and
  • a reliable estimate can
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