Document ID: chunk:federal_register_of_legislation:F2023C00419:body:0:p22
Version: federal_register_of_legislation:F2023C00419
Segment Type: other
Provision Reference: 
Character Range: 55707–59565

or non-occurrence of one or more uncertain future events not wholly within the control of the entity.
The inflow of economic benefits is virtually certain.                                                                                                                                                                        The inflow of economic benefits is probable, but not virtually certain.  The inflow is not probable.
The asset is not contingent (paragraph 33).                                                                                                                                                                                  No asset is recognised (paragraph 31).                                   No asset is recognised (paragraph 31).
                                                                                                                                                                                                                             Disclosures are required (paragraph 89).                                 No disclosure is required (paragraph 89).

Reimbursements
Some or all of the expenditure required to settle a provision is expected to be reimbursed by another party.
The entity has no obligation for the part of the expenditure to be reimbursed by the other party.             The obligation for the amount expected to be reimbursed remains with the entity and it is virtually certain that reimbursement will be received if the entity settles the provision.                                                                                                   The obligation for the amount expected to be reimbursed remains with the entity and the reimbursement is not virtually certain if the entity settles the provision.
The entity has no liability for the amount to be reimbursed (paragraph 57).                                   The reimbursement is recognised as a separate asset in the statement of financial position and may be offset against the expense in the statement of comprehensive income. The amount recognised for the expected reimbursement does not exceed the liability (paragraphs 53 and 54).  The expected reimbursement is not recognised as an asset (paragraph 53).
No disclosure is required.                                                                                    The reimbursement is disclosed together with the amount recognised for the reimbursement (paragraph 85(c)).                                                                                                                                                                            The expected reimbursement is disclosed (paragraph 85(c)).

B  Decision tree
The purpose of this diagram is to summarise the main recognition requirements of the Standard for provisions and contingent liabilities.

Note: In rare cases, it is not clear whether there is a present obligation. In these cases, a past event is deemed to give rise to a present obligation if, taking account of all available evidence, it is more likely than not that a present obligation exists at the end of the reporting period (paragraph 15 of the Standard).

C  Examples: recognition
All the entities in the examples have 31 December year-ends. In all cases, it is assumed that a reliable estimate can be made of any outflows expected. In some examples the circumstances described may have resulted in impairment of the assets—this aspect is not dealt with in the examples.
The cross-references provided in the examples indicate paragraphs of the Standard that are particularly relevant.
References to 'best estimate' are to the present value amount, where the effect of the time value of money is material.

Example 1  Warranties
A manufacturer gives warranties at the time of sale to purchasers of its product. Under the terms of the contract for