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1. Difference


1.1.1. • A known amount • Present obligation of entity arising from past event • Results in outflow of resources • Examples include; Trade payables, accrued salaries, wages • Recognized as and when the liability arises


1.2.1. • A liability of uncertain timing or amount • Recognized when it meets the recognition criteria

2. Recognition criteria for Provision

2.1. Present Obligation

2.1.1. must have been arise from a past event.

2.2. Probable outflow of resources

2.2.1. Probable if the event is more likely than not to occur.

2.3. Reliable Estimate

2.3.1. Where no reliable estimate can be made.

3. Measurement of a Provision

3.1. Best Estimate

3.1.1. The amount recognize shall be the best estimate of expenditure require to settle or transfer it to a third party.

3.2. Large Populations of Item

3.2.1. The obligation is estimated by weighting all possible outcomes by their associated probabilities.

3.3. Single Obligation

3.3.1. Outcome may be the best estimate of the liability.

4. Contingent Liabilities

4.1. exist at the reporting date but cannot be recognized because it fails to meet the recognition criteria (anyone or all)

4.1.1. Possible obligation arises from Past events. • It has yet to be confirmed whether the entity has a present obligation that could lead to an outflow of resources

4.1.2. Present obligation fails to meets the other two recognition criteria for provision recognition i.e: • It is not probable that an out flow of resources will occur • Reliable estimate of amount cannot be made

5. Contingent Assets

5.1. A possible asset that arises from past event. As its existence is yet to be confirmed

5.1.1. • arise from unplanned or other unexpected event that give rise to the possibility of an inflow of economic benefits • An entity shall not recognize a contingent asset, since this may result in recognition of income that mat never be realized • However, when the realization is virtually certain then its recognition is appropriate

6. MFRS 119 Employee Benefits

6.1. Objectives

6.1.1. to prescribe the accounting and disclosure for employee benefits

6.2. Scope

6.2.1. This standards should be applied by an employer in accounting for employee benefits

6.3. •recognised when it is earned, not when it is paid or payable •include benefits provided to either employees •it may be settled either directly to the employees •covers short term and long term benefits •formal plans or agreement between the enterprise & employees or their representatives)by legislative requirement or through constructive obligations

6.4. 5 Categories :

6.4.1. 1) Short-term employee benefits exp: wages, salaries......

6.4.2. 2) Post-employment benefits

6.4.3. 3) Long-term employee benefits

6.4.4. 4) Termination benefits

6.4.5. 5) Equity compensation benefits