According to AASB 137 Provisions, Contingent Liabilities and Contingent Assets

question 18

Multiple Choice

According to AASB 137 Provisions, Contingent Liabilities and Contingent Assets, when providing for the future, a future event such as the clean-up of a contaminated site, gains and other cash inflows that are expected to arise on the sale of asset related to the clean-up, must be treated as follows:

• A) set-off against the provision for the clean-up;
• B) measured separately of the provision;
• C) recognised directly in equity in the period in which the cash inflows arose;
• D) recognised as a deferred asset.

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Definitions:

Adjusted Cash Balance

The cash balance reported in a company's financial statements after adjustments have been made for checks written, deposits in transit, and other discrepancies.

Bank Statement

A document or electronic report issued by a bank summarizing transactions, including deposits and withdrawals, over a specific period.

Service Charge

A fee charged for a particular service provided by a company or institution.

Interest

The cost of borrowing money or the return on investment capital, often expressed as a percentage rate over a period of time.