Exam 5: Provisions, Contingent Liabilities and Contingent Assets

Which of the following is not within the scope of IAS 37?

Provisions in relation to which of the following balances are within the scope of IAS 37?

An event that gives rise to a present obligation, but which cannot be measured with sufficient reliability is an example of a:

At balance sheet date, Raschella Limited was awaiting the final details of a court case for damages awarded in its favour. The amount and possible receipt of damages is unknown and will not be decided until the court sits again in several months' time. How is this event dealt with in the preparation of the financial statements?

The following statement, contained in IAS 37, defines: 'a possible asset 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'

According to IAS 37, when providing for the future, a future event such as the clean-up of a contaminated site, gains and other cash inflows that are expected to arise on the sale of asset related to the clean-up, must be treated as follows:

Purcell Limited is a manufacturer of swimming pools and provides its customers with warranties at the time of sale. The warranty applies for three years from the date of sale. Past experience shows that there will be some claims under the warranties. The appropriate treatment of this item under IAS 37 Provisions, Contingent Liabilities and Contingent Assets, is to:

Which of the following statements is correct?

According to IAS 37, the appropriate treatment for a contingent asset in the financial statements of an entity is:

Entity A has provided a bank guarantee to a bank in relation to a loan provided to entity B. Entity B is solvent and shows no signs of defaulting on the loan. The treatment of the bank guarantee in the records of entity A is to: