IAS 37 ensures that appropriate measurement and recognition criteria are applied to provisions, contingent liabilities and contingent assets, and that sufficient disclosure is made in the financial statements to enable users to understand the provisions made.
*Provision - a liability of uncertain timing or amount
*Liabiliy - a present obligation of an entity to transfer economic benefits as a result of past transactions or events
*Legal obligation - an obligation that is contractual, arises due to legislation, or results from other operations of law
*Constructive obligation - an obligation that results where by an established pattern of past practices, published policies, or a sufficiently specific current statement, the entity has indicated to other parties that it will accept certain responsibilities, and as a result the entity has created a valid expectation in the mind of those parties that it will discharged those responsibilities
*Contingent liability - a possible obligation that arises from past events whose outcome is based on uncertain future events, or…