NAS 37 Quiz: Provisions, Contingent Liabilities and Contingent Assets

Study Notes

Nepal Accounting Standard 37 (NAS 37)

The objective of NAS 37 is to ensure that provisions are recognized and measured in a consistent manner, and that sufficient disclosure is made to enable users to understand the nature, timing, and amount of provisions.

Definition of Provisions in NAS 37

Provisions are defined as liabilities of uncertain timing or amount that arise from past events, are present obligations, and are likely to require an outflow of resources.

Recognizing a Provision in NAS 37

The key factor in recognizing a provision is that it must be probable that an outflow of resources embodying economic benefits will be required to settle the obligation.

Contingent Liabilities in NAS 37

Contingent liabilities are defined as possible obligations that arise from past events, are not present obligations, and are not probable that an outflow of resources will be required.

Selecting and Applying Accounting Policies in NAS 37

In the absence of explicit guidance, the basis for selecting and applying accounting policies is to develop policies that are relevant to the circumstances of the entity and that result in financial statements that faithfully represent the financial position and performance of the entity.

Description

Test your knowledge of Nepal Accounting Standard 37 on provisions, contingent liabilities, and contingent assets with this quiz. The quiz covers the objective, scope, definitions, recognition, and other relevant contents of NAS 37.