《ACCA-F7-知识点总结》由会员分享，可在线阅读，更多相关《ACCA-F7-知识点总结（38页珍藏版）》请在金锄头文库上搜索。
1、ACCA 考试 F7 知识点辅导I. The accounting problemBefore IAS37 provisions were recognized on the basis of prudence， little guidancewas given on when a provision should be recognized and how it should be measured.This gave rise to inconsistencies， and also allowed profits to be manipulated.Some problems are n
2、oted below：(a) Provisions could be recognized on the basis of management intentions， ratherthan on any obligation to be entity;(b) Several items could be combined into one large provision. There were known asbig bath provisions;(c) A provision could be created for one purpose and then used for anoth
3、er;(d) Poor disclosure made it difficult to assess the effect of provisions on reported profits. In particular ， provisions could be created when profits were high and released when profits were low in order to smooth profits.(1) DefinitionsIAS 37 views a provision as a liability.A provision is a li
4、ability of uncertainty timing or amount;A liability is an obligation of an enterprise to transfer economic benefits as a result of past transactions or events.Provision must be based on obligations， not management intentions.(2) Under IAS37， a provision should be recognized：a. When an enterprise has
5、 a present obligation;b. It is probable that a transfer of economic benefits will be required to settle it;c. A reliable estimate can be made of its amount; if a reasonable estimate cannot be made ， then the nature of the provision and the uncertainties relating to the amount and timing of the cash
6、flows should be disclosed.A provision is made for something which will probably happen. It should be recognized when it is probable that a transfer of economic events will take place and when its amount can be estimated reliably.(3) Contingent liabilitiesDefinitionThe Standard defines a contingent l
7、iability as：(a) A possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the enterprise; or(b) A present obligation that arises from past events but is not
8、 recognized because：(i) It is not probable that an outflow of resources embodying economic benefits will be required to settle the obligation; or(ii) The amount of the obligation cannot be measured with sufficient reliability.As a rule of thumb， probable means more than 50% likely. If an obligation
9、isprobable ， it is not a contingent liability instead ， a provision is needed.Treatment of contingent liabilitiesContingent liabilities should not be recognized in financial statements but they shouldbe disclosed. The required disclosures are：(a) A brief description of the nature of the contingent l
10、iability;(b) An estimate of its financial effect;(c) An indication of the uncertainties that exist;(d) The possibility of any reimbursement;(4) Contingent assetsDefinitionA possible asset that arises from the past events whose existence will be confirmedby the occurrence of one or more uncertain fut
11、ure events not wholly within the enterprise s control.A contingent asset must not be recognized. Only when the realization of the relatedeconomic benefits is virtually certain should recognition take place. At that point， theasset is no longer a contingent asset.Disclosure ： contingent assetsConting
12、ent assets must only be disclosed in the notes if they are probable. In that case a brief description of the contingent asset should be provided along with an estimate of its likely financial effect.II. Specific application1. Future operating lossesIn the past ， provisions were recognized for future
13、 operating losses on the grounds of prudence. However these should not be provided for the following reasons. They relate to future events; There is no obligation to a third party. The loss-making business could be closed and the losses avoided.2. Onerous contractsAn onerous contract is a contract i
14、n which the unavoidable costs of meeting the contract exceed the economic benefits expected to be received under it.A common example of an onerous contract is a lease on a surplus factory. Theleaseholder is legally obliged to carry on paying the rent on the factory ， but they will not get any benefit from using the factory.The least net cost of an onerous contract should be recognized as a provision. The least net cost is the lower of the cost of fulfilling the contract or of terminating it and suffering any penalty p
