Provisions & Contingencies (IAS 37): Recognition, Expected Values & Unwinding
Recognise, disclose or ignore, expected value vs most likely outcome, discounting and unwinding, decommissioning, onerous contracts, restructuring and the movement table: 8 labs on one appliance maker's year end.
The first lesson is free — no account needed.
About this course
A provisions and contingencies course that closes the year of one fictional appliance maker, Halden Ridge Appliances, in a spreadsheet, for accountants, auditors, finance students and anyone preparing for an IFRS exam. You run eight year-end items through the recognise, disclose or ignore decision with one nested IF, measure a warranty provision as an expected value and a lawsuit by its most likely outcome, discount a settlement and unwind the discount as a finance cost, add a decommissioning provision to the cost of a plant, test an onerous contract as the lower of the loss and the exit penalty, sort which closure costs belong in a restructuring provision, and complete the movement table for five provision classes with a waterfall chart. General IAS 37 and ASC 450 concepts, with no affiliation with the IASB or FASB. Educational only, not accounting advice. The first lab is free.
Lessons
- Recognise, Disclose or Ignore? The IAS 37 Decision TableFree
- Best Estimate for a Large Population: Expected Value of Warranties Pro
- Best Estimate for a Single Obligation: the Most Likely Outcome Pro
- Discounting a Provision and Unwinding the Discount Pro
- Decommissioning & Restoration: Provision Added to the Asset Cost Pro
- Onerous Contracts: Unavoidable Costs vs Economic Benefits Pro
- Restructuring Provisions: What Qualifies and Which Costs Go In Pro
- The Provision Movement Table: Opening, Additions, Used, Released, Unwinding, Closing Pro