AS 29 Quick Revision

Provision under AS 29



Provision should be recognised (amount debited to P&L a/c) only when these all 3 Conditions must satisfy):

An enterprise has a present obligation as a result of a past event
It is probable that there will be an outflow of resources
A reliable estimate can be made of the amount of obligation

Contingent Liability under AS 29

It is a present obligation that arises from past events, but is not recognised because:

It is not probable that an outflow of resources to settle the obligation.
A reliable estimate of the amount of the obligation cannot be made.
An enterprise should not recognise a contingent liability but it has to be disclosed by way of Footnote.

Contingent Asset under AS 29

A contingent asset is a possible asset that arises from past events the existence of which will be confirmed only by the occurrence or nonoccurrence of one or more uncertain future events not wholly within the control of the enterprise.

Note: An enterprise should not recognise a contingent asset.

Disclosure under AS 29 (V.Imp)

For each class of Provision, an enterprise should disclose:

The carrying amount at the beginning and end of the period
Additional provisions made in the period , including increases to existing provisions.
Amounts used ( i.e., incurred and charged against the provision) during the period ; and
Unused amounts reversed during the period
A brief description of the nature of the obligation and the expected timing of any resulting outflows of economic benefits.

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