📊 AS 29 – Provisions, Contingent Liabilities & Contingent Assets ✍️ Remember the 3️⃣ conditions for Provision: ❓ Present Obligation → There must be a present obligation from a past event ❓ Probable Outflow → Settlement is probable to require an outflow of resources ❓ Reliable Estimate → Amount can be reliably estimated 💡 Exam Trick (Very Important ⚡) In the exam, follow these steps: 👉 Step 1: Identify whether there is a present obligation 👉 Step 2: Check whether outflow is probable 👉 Step 3: Check whether the amount can be reliably estimated 👉 Step 4: Decide whether to recognise, disclose, or ignore 🧠 Golden Lines (for MCQs + Theory): 📌 Provision → Recognise when all 3 conditions are satisfied ✅ 📌 Contingent Liability → Not recognised, generally disclose if outflow is not remote 📌 Contingent Asset → Not recognised; disclose when inflow is probable 📌 Contingent Asset becomes virtually certain → Recognise as an Asset ✅ ⚡ Easy Memory Trick: • PROVISION = Present + Probable + Reliable • Contingent Liability = Possible Obligation / Present Obligation but not probable or not reliably measurable • Contingent Asset = Possible Asset 🎯 Pro Tip: In the exam, don’t recognise a contingent item just because there is a possibility. First determine the probability of outflow/inflow, then decide whether it is recognised or disclosed.
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