AASB 137/IAS 37, also known as Provisions, Contingent Liabilities and Contingent Assets, is a standard that requires certain provisions to be recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

Here are the options provided:

1. Onerous contracts: These are contracts in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. According to AASB 137/IAS 37, if an entity has a contract that is onerous, the present obligation under the contract should be recognized and measured as a provision. Therefore, onerous contracts fall within the scope of AASB 137/IAS 37.

2. Employee benefits: These are typically covered under a different standard, AASB 119/IAS 19 Employee Benefits, not AASB 137/IAS 37.

3. Insurance contracts: These are also typically covered under a different standard, AASB 4/IAS 4 Insurance Contracts, not AASB 137/IAS 37.

4. Accruals: These are not provisions as defined by AASB 137/IAS 37. Accruals are amounts that are owed but not yet paid. While they represent a liability, they do not meet the criteria for a provision under AASB 137/IAS 37.

So, the correct answer is Onerous contracts.

Question

AASB 137/IAS 37, also known as Provisions, Contingent Liabilities and Contingent Assets, is a standard that requires certain provisions to be recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

Here are the options provided:

1. Onerous contracts: These are contracts in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. According to AASB 137/IAS 37, if an entity has a contract that is onerous, the present obligation under the contract should be recognized and measured as a provision. Therefore, onerous contracts fall within the scope of AASB 137/IAS 37.

2. Employee benefits: These are typically covered under a different standard, AASB 119/IAS 19 Employee Benefits, not AASB 137/IAS 37.

3. Insurance contracts: These are also typically covered under a different standard, AASB 4/IAS 4 Insurance Contracts, not AASB 137/IAS 37.

4. Accruals: These are not provisions as defined by AASB 137/IAS 37. Accruals are amounts that are owed but not yet paid. While they represent a liability, they do not meet the criteria for a provision under AASB 137/IAS 37.

So, the correct answer is Onerous contracts.

Knowee AI · Accepted Answer

AASB 137/IAS 37, also known as Provisions, Contingent Liabilities and Contingent Assets, is a standard that requires certain provisions to be recognized when there is a present obligation as a result of a past event, it is probable that an outflow of resources embodying economic benefits will be required to settle the obligation, and a reliable estimate can be made of the amount of the obligation.

Here are the options provided:

1. Onerous contracts: These are contracts in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it. According to AASB 137/IAS 37, if an entity has a contract that is onerous, the present obligation under the contract should be recognized and measured as a provision. Therefore, onerous contracts fall within the scope of AASB 137/IAS 37.

2. Employee benefits: These are typically covered under a different standard, AASB 119/IAS 19 Employee Benefits, not AASB 137/IAS 37.

3. Insurance contracts: These are also typically covered under a different standard, AASB 4/IAS 4 Insurance Contracts, not AASB 137/IAS 37.

4. Accruals: These are not provisions as defined by AASB 137/IAS 37. Accruals are amounts that are owed but not yet paid. While they represent a liability, they do not meet the criteria for a provision under AASB 137/IAS 37.

So, the correct answer is Onerous contracts.

Which of the following is an example of a provision falling within the scope of AASB 137/IAS 37? Reading required Learning objective 9.1 on page 252Group of answer choicesOnerous contracts.Employee benefits.Insurance contracts.Accruals.

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