ACCA F3 IAS 37 Provisions, Contingent Liabilities and Contingent Assets
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Hi, is this lecture only 15 minutes? It seems as if it was cut short
It has not been cut short. There is nothing else involved!
Hello sir,
Thank you for this lecture. Please, will the provision be deduct from the profit?
Example: Provision of $100 was made to pay back customers that will return faulty TV.
My question is will this $100 be deduct from the profit in income statement.
Thank you.
Yes – it will be treated just the same way as an accrual is treated.
Mr Moffat, how do we recognise the contingent asset? Cr accrued income Dr Receivales?
Yes, that is correct (provided, of course, that is is classed as “virtually certain”) 🙂
(although in F3, you are unlikely to be asked for the entry – you will just be tested on the rules as to whether you recognise, disclose as a note, or do nothing 🙂 )
thanx for the sir. but I cant complete the video streaming. dunno why. and my internet connection is okay. please help me. thank you 🙂
Try the support page
ummm.. when its possible under liabilities and we will write in notes, will we have any amount owing, that we will have to pay ??
If it’s available to put a value on a possible obligation then, yes, that value should be given within the contingent liability note in the Notes to the Financial Statements.
If it’s not possible to quantify, hen that also should be stated together with an explanation WHY it’s not possible to quantify
Ok?
so, the issue and the estimated damage will be disclosed in the financial statement?
That is true 🙂
so we will issue and the estimated damage will be disclosed in the financial statements??
Thank you Sir 😀
very good.how can i download these lecture…..plz reply
Lectures cannot be downloaded – it is the only way that we can keep this website free of charge.
Hello Sir
How would you know the likelihood of an event,is it always stated in percent or a note?
very concise and detailed
Concise!
very good lecture
How do you decide the %., who decides it ? And what happens if someone lies. And say e.g something is 90% certain. But. They record it as 25%. Thank you
Got the answer. Posted midway video
can uou please give some explanation on remote
‘remote’ is when the chance of something happening is very small – less than a 5% chance.
Very Helpful
In test question 2, can you please explain statement 1? Why does the company have to create a provision if only 5% of sales give rise to a warranty claim?
The reason is that it is virtually certain that they will have to pay for some warranty claims.
(The only relevance of the 5% is that they would probably use this to estimate the amount needed for the provision)
Ops!!! We may fail the exam because of those kind of question !!!
True – you have to be really careful with the wording of the questions.
Greattt lecture.. 🙂 🙂 🙂
Simply understandable.. very clear.. thanks a lot..
what’s the name of this brilliant tutor?
he’s awesome
very good lecture..thnk you..:)
very good lecture
wonderful session
This lecture help me alot to understand the topic. Thnaks OT 🙂