Current Liabilities, Provisions, Contingencies and Events After the Reporting Period

Accounting for all of a reporting entity's liabilities is necessary in order to accurately convey its financial position to investors, creditors and other stakeholders. International Accounting Standards 1 (IAS 1) requires that the reporting entity must present current and non‐current assets, and current and non‐current liabilities, as separate classifications on the face of its statement of financial position, except when a liquidity presentation provides more relevant and reliable information. This chapter provides examples of provisions that would need to be recognized, based on the rules laid down by the IAS. It also discusses common provisions and the accounting treatment that is often applied to these particular items. The issue addressed by IAS 10 is to what extent anything that happens between the entity's end of the reporting period and the date the financial statements are authorized for issue should be reflected in those financial statements.