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Under AASB 137 Provisions, Contingent Liabilities and Contingent Assets, the appropriate accounting treatment for future operating losses is to:
A) determine a reasonable estimate of the future losses and recognise as a provision.
B) determine the future losses and charge them directly against retained earnings.
C) not recognise such items in the financial statements.
D) determine the future losses and discount them to present value.
Future Operating Losses
Projected losses from future operations, often considered in the context of business planning and impairment testing.
Financial Statements
Documentation presenting a summary of a corporation's financial status, consisting of the balance sheet, income statement, and statement of cash flows.
Present Value
The present value of a future amount of money or series of cash flows, discounted at a certain rate of return.
- Learn the specifications for the recognition of provisions, contingent liabilities, and contingent assets following AASB 137.
- Assess the impact of future responsibilities and uncertain incidents on financial disclosures.
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Learning Objectives
- Learn the specifications for the recognition of provisions, contingent liabilities, and contingent assets following AASB 137.
- Assess the impact of future responsibilities and uncertain incidents on financial disclosures.
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