If the conditions for a provision are met but it is impossible to make a reliable estimate of the amount,the provision should not be recognized in the income statement.

Question

Quizplus · Accepted Answer

When it is impossible to make a reliable estimate of the amount of a provision, the provision should not be recognized in the financial statements, as per accounting standards. Instead, a disclosure in the notes to the financial statements is required to inform users about the nature of the obligation and the uncertainty of the amount.

If the Conditions for a Provision Are Met but It