IAS 37 Provisions, Contingent Liabilities and Contingent Assets contains an unusual definition of contingent liabilities. The definition covers 3 different items that do not form a natural class, and it also differs from how people (other than people applying IAS 37) commonly think about contingent liabilities. This post explains how IAS 37 ended up having… Continue reading Defining contingent liabilities
Tag: Provision
Booking a provision does not ‘set money aside’
A story this morning in The Times commits a serious and misleading wording error that is surprisingly common in the UK. Here are the headline and the first two and a half paragraphs: Santander puts £295 million aside for car loan claimsThe brewing controversy over mis-sold car loans has forced Santander UK to set… Continue reading Booking a provision does not ‘set money aside’
Pension accounting under IAS 19
IASC completed a major revision of its standard on pension costs in 1998, when it issued IAS 19 Employee Benefits. But although that was a major update to the Standard, the revision did not involve a thorough overhaul of every important aspect of the Standard. Scope limitations adopted by the IASC at the start of… Continue reading Pension accounting under IAS 19
Own credit risk
The topic of own credit risk generates perhaps more strongly held views than any other accounting topic. For example, in around 2011, the IASB was developing a discussion paper on insurance contracts. Some of us visited one of the largest insurers in the world. They knew almost nothing about the project. But they had heard… Continue reading Own credit risk