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ACCA Applied Knowledge · Financial Accounting · Disclosure notes

Which of the following must Pell Co include in the notes for each class of provision under IAS 37?

For each class of provision, Pell Co must show a movement reconciliation: opening and closing carrying amounts, additional provisions made, amounts used and unused amounts reversed, along with a description of the nature and expected timing. A closing balance alone does not meet IAS 37.

  1. AThe carrying amount at the start and end of the period, with additions, amounts used and unused amounts reversedCorrect
  2. BOnly the closing balance of the provision
  3. CThe names of the individuals expected to receive payment
  4. DOnly the amount of the charge to profit or loss for the year

Explanation

IAS 37 requires a reconciliation for each class of provision: opening and closing carrying amounts, additions, amounts used, unused amounts reversed and unwinding of discount, plus a brief description and timing. Closing balance alone is insufficient.

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