IAS 37 PROVISIONS, CONTINGENT ASSESTS AND LIABILITIES

1. Definitions

1.1. Provision: liability in which there is uncertainty about its amount or maturity

1.2. Contingent liability: Possible obligation arising from past events

1.3. Contingent asset: possible asset as a result of past events whose existence must be confirmed only by the occurrence or not of future events.

2. Provision recognition

2.1. The entity has a legal or implicit obligation as a result of a past event

2.2. Resources are likely to be released to settle the obligation

2.3. A reliable estimate of the timing of the obligation can be made

3. Recognition of liabilities and contingent assets

3.1. Contingent liability

3.1.1. The entity should not recognize a contingent liability

3.2. Contingent asset

3.2.1. The entity must recognize a contingent asset

4. Future loss of operations

4.1. Provisions are not recognized for this concept since they do not meet the definition of a liability or the criteria for recognizing provisions.

5. Restructuring

5.1. The recognition of provisions for restructuring can only be recognized when

5.1.1. Have a detailed formal plan to carry out the restructuring in which they are identified

5.1.2. A real expectation of restructuring has been created

5.1.3. Value of the provision will only include the estimated disbursements of said restructuring