1.

According to PAS 37, provisions are measured at

a. the entity’s best estimate of the settlement amount.
b. the expected value of the settlement amount.
c. the mid-point amount of a range of estimates.
d. any of these, whichever is most appropriate

2. According to PAS 37, a provision does not arise from

a. restructuring. c. product warranties.
b. future operating losses. d. constructive obligation.

3. According to PAS 37, a provision is

a. a present obligation that cannot be measured reliably.
b. a possible obligation that arises from past events.
c. a liability of uncertain timing or amount.
d. all of these

4. According to PAS 37, contingent liabilities are

a. recognized and disclosed.
b. always disclosed.
c. disclosed only, if their expected occurrence is probable.
d. not disclosed if their expected occurrence is remote.

5. Which of the following statements is correct?

a. A provision is recognized only when it represents a present obligation.
b. An event or transaction that meets both the “probable outflow of economic benefits” and
“reliable measurement” criteria is always recognized.
c. A contingent asset that is possible is ignored.
A contingent liability that is possible is ignored.