Time flies with great content! Renew in to keep enjoying all our premium content.
Prime
The right techniques for estimating provisions on your balance sheet
Interest rate risk is the risk that a financial instrument's fair value or future cash flows will fluctuate because of changes in interest rates. FILE PHOTO | SHUTTERSTOCK
According to the International Accounting Standard (IAS) 37, a provision is a liability of uncertain timing and amount. Examples include provisions for pending litigation, environmental/climate-related provisions, provisions for planned restructuring or sale of business and warranty provisions for goods sold.
Due to their degree of uncertainty, provisions differ from other types of liabilities that organisations hold on their balance sheets, such as trade payables and accruals.
