what the different between Provision and contingent liabilities?

Question

please ., i want examples

Answer 1

Until the ED is issued as a revised IAS, IAS 37 gives the following definitions:

Provision: A liability of uncertain timing or amount.

A Liability exists if:
* (there is) Present obligation as a result of past events
* Settlement is expected to result in an outflow of resources (payment)

A Contingent liability exists if there is :
* a possible obligation depending on whether some uncertain future event occurs, or
* a present obligation but payment is not probable or the amount cannot be measured reliably

Recognition of a Provision
An enterprise must recognise a provision if, and only if: [IAS 37.14]
* a present obligation (legal or constructive) has arisen as a result of a past event (the obligating event),
* payment is probable ('more likely than not'), and
* the amount can be estimated reliably.
An obligating event is an event that creates a legal or constructive obligation and, therefore, results in an enterprise having no realistic alternative but to settle the obligation. [IAS 37.10]
A constructive obligation arises if past practice creates a valid expectation on the part of a third party, for example, a retail store that has a long-standing policy of allowing customers to return merchandise within, say, a 30-day period. [IAS 37.10]

A possible obligation (a contingent liability) is disclosed but not accrued. However, disclosure is not required if payment is remote. [IAS 37.86]

Examples of provisions are
* Provisions for one-off events (restructuring, environmental clean-up, settlement of a lawsuit) which are measured at the most likely amount. [IAS 37.40]
* Provisions for large populations of events (warranties, customer refunds) which are measured at a probability-weighted expected value. [IAS 37.39]

An example of a contingent liability is a lawsuit where it is more likely than not that no present obligation exists, in which case the enterprise should disclose a contingent liability, unless the possibility of an outflow of resources is remote, in which case no disclosure is required. [IAS 37.15]

Pls refer to the summary of this IAS at the attached site.

Answer 2

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Provision is a legal clause in a document that means that something will happen if the document is executed Contingent is a condition in a legal document that something will happen ONLY if something else happens first.

Answer 3

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RE:
what the different between Provision and contingent liabilities?
please ., i want examples

Answer 4

You mean difference? There is none, they are both words that have no use in this world