AASB 137 Provisions, Contingent Liabilities and Contingent Assets provides the definition of a/an as: 'a contract in which the unavoidable costs of meeting the obligations under the contract exceed the economic benefits expected to be received under it'.

Question

Quizplus · Accepted Answer

The definition provided pertains to an onerous contract, which is a situation where the costs of fulfilling the obligations of a contractual agreement outweigh the economic benefits expected to be received under it. This requires recognition of a provision under AASB 137. The other options, future operating loss, deferred liability, and present obligation, do not fit the definition given in the question.

AASB 137 Provisions, Contingent Liabilities and Contingent Assets Provides the Definition