Syllabus B8

• Explain why an accounting standard on provisions is necessary – give examples of previous abuses in this area.
• Define provisions, legal and constructive obligations, past events and the transfer of economic benefits.
• State when provisions may and may not be made, and how they should be accounted for.
• Explain how provisions should be measured.
• Define contingent assets and liabilities – give examples and describe their accounting treatment.
• Identify and account for:
– Onerous contracts
– Environmental and similar provisions.