Section A3. 3: Provisions


Full and exact liability data enables an

Agency to get fully mindful of its financial obligations and the questions expected to have an effect on their greatest value. This

Section talks about the requirements pertaining to the recognition

measurement and disclosure of conditions.


Section 32 of the Economic Management Act requires every Accountable Official and every worker of an Firm to adhere to the Treasurer's Directions. Procedures

Provisions are liabilities of uncertain timing or perhaps amount.

Acknowledgement of Provisions

Provisions are to be recognised when: we have a present obligation as a result of a past function, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, the quantity of the supply can be reliably measured, and a separate the liability is certainly not otherwise recognised.

Measurement of Provisions

The amount recognised as a provision shall be the best estimate in the expenditure instructed to settle this current obligation for reporting particular date.

Disclosure and Management of Provisions

For each category of provision a detailed getting back together of the transporting amounts in the beginning and end of the period is to be unveiled in the paperwork to Agency financial assertions.

Conditions are to be on a regular basis reviewed and recorded portions revised accordingly.

Reimbursements Against Provisions

Where an Agency is entitled to recover several or all the expenditure linked to a recognised provision, the reimbursement shall be recognised being a separate advantage where it can be virtually sure that the reimbursement will be received if the Company settles the associated legal responsibility.

For authoritative instruction and guidance reference point should be made to related Treasurer's Directions and associated discourse, relevant Australian Accounting Specifications and other interpretative authorities.

Given: February 2010

Section A3. 3: Financial obligations – Conditions


Exactly what Provisions?

A3. 3. one particular

Recognition of Provisions

A3. 3. 2

Measurement of Provisions

A3. 3. 3

Disclosure and Management of Provisions

A3. 3. four

Reimbursements Against Provisions

A3. 3. several

Appendix A Accounting intended for Provisions -- Examples


Financial Managing Act


AASB tips

Presentation of Financial Statements

AASB 137

Procedures, Contingent Debts and Broker Assets

(from 1 Come july 1st 2008)

Related Treasurer's Directions:

A2. you

Accounting – Assets: Overview

A2. a few

Accounting – Assets: Downgrading and Amortisation

A2. 7

Accounting – Assets: Receivables

A3. you

Accounting – Liabilities: Guide

A3. 5

Accounting – Liabilities: Worker Benefits

A3. 6

Accounting – Financial obligations: Leases

A3. 7

Accounting – Debts: Contingent Debts

G2. 5

Governance – Accountability: Guarantees and Indemnities


Coverage Brief – Liabilities Problems 2: Dotacion for Dividends

Issued: Feb 2010

Section A3. several: Liabilities – Provisions


A3. 3. 1

Provisions will be liabilities of uncertain timing or amount.


Conditions are a subsection, subdivision, subgroup, subcategory, subclass of liabilities distinguished from all other liabilities by degree of doubt surrounding the amount or time of the outflow of solutions embodying economic benefits required to settle them. Whilst most liabilities possess some uncertainty (for example, accumulated liabilities) this kind of uncertainty is usually insignificant and impact materially on the time or quantity of the output of solutions to be made.


The presence of a supply is evidenced by a present financial requirement created with a past transaction or function, for which the quantity or timing of payment will be moderately uncertain. To get a present monetary obligation to exist a company must have not any realistic alternative but to settle the...

References: (from you July 2008)

Related Treasurer's Directions:

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