IAS 37 | Onerous Contract | Contingent Assets | Restructuring Charge International Accounting

IAS 37 requires the recognition of a provision for the present obligation related to an “onerous contract,” that is, a contract in which the unavoidable costs of meeting the obligation of the contract exceed the economic benefits expected to be received from it. However, recognition of a provision for expected future operating losses is not allowed. When an onerous contract exists, a provision should be recognized for the unavoidable costs of the contract, which is the lower of the cost of fulfillment and the penalty that would result from nonfulfillment under the contract. When a contract becomes onerous as a result of an entity’s own action, the resulting provision should not be recognized until that action has actually occurred.

My website:
Facebook page:
LinkedIn:
Twitter:
Email Contact: Mansour.farhat@gmail.com

ias 37 provisions contingent liabilities and contingent assets,ias 37 examples,ias 37 summary,ias 37 restructuring,ias 37 questions and answers,ias 37 provisions and contingent liabilities,ias 37 onerous contract example,ias 37 opentuition,onerous contract example,onerous contract example ias 37,onerous contracts ifrs 17,onerous contract provision example,onerous contract meaning,onerous contract double entry,onerous contract provision,