This note describes the appropriate accounting treatment for contingencies in accordance with International Financial Reporting Standards and identifies key differences in accounting standards for private enterprises. Accounting for contingencies includes provisions, contingent liabilities and contingent assets. The note describes both how to decide whether a provision should be included and how to measure a rule. Furthermore, the note highlights the differences between provisions and liab … Read more »

This note describes the appropriate accounting treatment for contingencies in accordance with International Financial Reporting Standards and identifies key differences in accounting standards for private enterprises. Accounting for contingencies includes provisions, contingent liabilities and contingent assets. The note describes both how to decide whether a provision should be included and how to measure a rule. Furthermore, the note highlights the differences between provisions and contingent liabilities discussed when contingent assets should be recognized, and identified specific guidelines for restructuring provisions. Finally, the disclosure requirements are identified.
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Darren Henderson
6 pages.
Release Date: 2 November 2011. Prod #: W11458-PDF-ENG
Notes on accounting for contingent liabilities HBR case solution