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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Recognition in FS
Will the following element should be recognised in the financial statements of an entity in the manner described?
As a non-current liability: a provision for possible hurricane damage to property for a company located in an area which experiences a high incidence of hurricanes
Hi,
No, we cannot recognise the provision as there is no present obligation as a result of a past event. The event (the hurricane) is in the future plus we have no legal or constructive obligation to make good the property damage.
Thanks