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BT Ias 37
BT Ias 37
Chi phí sửa chữa Tỷ lệ hỏng sau 1 năm Tỷ lệ hỏng sau 2 năm
Mức độ hỏng nhỏ 3% doanh thu 30% 40%
Mức độ hỏng lớn 15% doanh thu 10% 10%
Tính đến cuối năm x0, doanh thu bán xe ô tô của công ty M là $1,000,000. Biết lãi suất chiết khấu là 10%/ năm. Năm tài chí
Yêu cầu:
Tính toán và trình bày bút toán trích lập dự phòng vào cuối năm x0. (1 điểm)
Vào năm x1, Công ty M đã phát sinh chi phí bảo hành cho các xe ô tô hỏng là $20,000. Do những thay đổi công nghệ trong c
tính lại tỷ lệ hỏng của năm thứ 3 sau khi bán hàng là: tỉ lệ hỏng nhỏ là 30% và tỉ lệ hỏng lớn là 10%.
Tính toán lại chi phí cần lập dự phòng cho doanh thu năm x0 tại thời điểm năm năm x1. Biết rằng lãi suất chiết khấu không
Theo số liệu doanh thu năm x0, hoàn chỉnh bảng tính toán bên dưới và trình bày các bút toán lập dự phòng trong năm x1. (
Năm
X0
X1
1. Assessment of provision
Reliable estimate?
X0 X1 X2
Doanh thu
CP sửa chữa nhỏ
Chi phí sửa chữa lớn
Ước tính chi phí sửa chũa 3 năm bảo hành
NPV(10%)(ngày 31/12/X0)
-
Debit P/L - Expense for warranty repairs -
Credit Short-term liabilities - provision -
Credit Long-term liabilities - provision
3. Measurement of provision (31/12/X1)
Ước tính chi phí sửa chữa X2&X3 0
NPV(10%)(ngày 31/12/X1) 0 0
0
Debit - Short-term liabilities - provision Debit - Long-term liabilities - provision
Credit - Cash Credit - Short- liabilities - provi
Credit- P/L (Expense for warranty repairs- gain) Credit- P/L (Expense for warran
Năm Số lập dự phòng ngày 1/1 Chi phí bảo hành (P/L) Chi phí sửa chữa thực tế
X0
X1
Bút toán X1
In the year 20X2, CarProd makes warranty repairs on products sold in 20X1 for total cost of 8,82 mil. EUR.
Show the appropriate accounting treatment.
hay đổi công nghệ trong các năm gần đây, ô tô ít hỏng hơn so với quá khứ. Vì vậy, Công ty M ước
%.
lãi suất chiết khấu không thay đổi. (1 điểm)
dự phòng trong năm x1. (1,5 điểm)
X3
-
0
mil. EUR.
-
0
-
www.IFRSbox.com Example 1: Provisions in various situations IAS 37: Provisions
1. Warranties
CarProd is a car manufacturer who gives warranties to its clients at the time of purchase. Under the terms of
sale contract, CarProd undertakes to repair manufacturing defects or replace defective parts that become
apparent within 5 years from the date of sale.
Based on previous experience, it is probable that there will be some claims under warranties.
Should CarProd recognize any provision?
Assessment
Present obligation as a result of past event? Yes
Provision
2. Contaminated land
A. Legislation to be enacted
PhthalateCorp operating in chemical industry worldwide regularly causes contamination of land ,
but cleans up only when is required so under the laws of particular country. Country Cleanlandia has
had no such legislation and PhthalateCorp has been contaminating land for several years.
As at 31 December 20X1 it is certain that draft of law requiring clean-up of contaminated land (no
matter when) will be enacted after the year-end in Cleanlandia.
Should PhthalateCorp recognize any provision?
Assessment
Present obligation as a result of past event? Yes
Provision
2. Contaminated land
B. Constructive obligation
BenzCorp operating in chemical industry worldwide regularly causes contamination of land , but
has widely published its environmental policy in which it undertakes to clean up all
contamination. Benz Corp operates also in the countries without any environmental legislation.
Should BenzCorp recognize any provision for clean-up of land also in countries without applicable
laws?
Assessment
Present obligation as a result of past event? Yes
Provision
3. Refunds policy
Tracy's Co, home appliances retailer, has a generally known policy of refunding purchases by unhappy customers even though it is not required by law.
Should Tracy's recognize any provisions for refunds?
Assessment
Present obligation as a result of past event? Yes
Provision
6
www.IFRSbox.com Example 1: Provisions in various situations IAS 37: Provisions
31-Dec-20X1 31-Dec-20X2
Present obligation as a result of past event? No No
Reliable estimate?
Nothing Nothing
Seats Overhauling
Present obligation as a result of past event? No Yes
Nothing Provision
6. Staff retraining
Government introduces a number of changes to the income tax system. As a result of these
changes, Taxexperts Co will need to retrain a large number of its financial services staff in
order to continue providing up-to-date information and advices to its clients.
Should Taxexperts recognize provision for retraining?
Assessment
Present obligation as a result of past event? No
Reliable estimate?
Nothing
7
www.IFRSbox.com Example 2: Contingent liabilities and contingent assets IAS 37: Provisions
HamburgerPrince, fast food company, organized birthday party for 20 children where burgers from minced beef meat were served. After the party, 8
children came to hospital suffering from food poisoning and their parents believe that it is due to burgers not fried properly.
Parents are now suing HamburgerPrince. Lawyer of this company believes that based on past similar court cases and insufficient evidence against
HamburgerPrince there is 40% chance of losing the case and HamburgerPrice would have to pay 160 000 EUR to indemnify children for poisoning.
What should HamburgerPrince do in its financial statements in relation to this claim?
Assessment
Present obligation as a result of past event? Yes
Reliable estimate?
Contigent Liability
A few months later, court case proceeded further where one employee of HamburgerPrince , acting as a witness, stated that frozen beef burgers supplied
by local meat processing company Beefers showed signs of potential bacterial infection. Judge ordered immediate inspection in Beefers to verify its'
hygienic and work standards. Inspection proved presence of several bacteria in half products. Court case against HamburgerPrince has not been closed
yet.
Based on this new evidence, lawyer believes that chance to lose the case increased to 80% .
HamburgerPrince then decided to sue Beefers for supplying contaminated burgers and causing them damage. However, Beefers argue that if
HamburgerPrince would have fried burgers properly, every possible infection would be destroyed. Lawyer believes that HamburgerPrince has 90%
chance of winning this case with compensation of 160 000 EUR from Beefers.
What should HamburgerPrince do in its financial statements in relation to new events?
Provision
Asset
www.IFRSbox.com Example 3: Measurement of and accounting for provisions IAS 37: Provisions
CarProd ,car manufacturer, undertakes to repair manufacturing defects or replace defective parts that become apparent within 5 years from the date of sale.
Past experience and future expectations indicate the following:
1. Repair costs depend on the extent of defects: 400 mil. EUR in case of minor defects and 700 mil. EUR in case of major defects (if all cars would have minor / major
defects).
2. CarProd estimates 80% cars with no defects, 18% cars with minor defects and 2% cars with major defects were sold in the year 20X1.
3. 10% of all repairs is made in the 1st year after sale, 15% in the 2nd year, 20% in the 3rd year, 25% in the 4th year and 30% in the 5th year. These figures relate to both
major and minor repairs. All cash flows happen at the end of year.
4. Pre-tax current market rate is 3% p.a.
What should CarProd disclose in its financial statements as at 31 December 20X1?
1. Assessment of provision
Provision
2. Measurement of provision
A B C=A*B
Defects Costs Probability Expected value
No defects 0 80% 0
Minor defects 400 18% 72
Major defects 700 2% 14
Total 86
Formula used:
1/(1+0,03)^year
3. Accounting treatment
Recognition of provision:
Debit P/L - Expense for warranty repairs: 77,61 77.61 mil. EUR
Credit Short-term liabilities - provision: 8,35 8.35 mil. EUR
Credit Long-term liabilities - provision: 69,26 69.26 mil. EUR
In the year 20X2, CarProd makes warranty repairs on products sold in 20X1 for total cost of 8,82 mil. EUR.
Show the appropriate accounting treatment.
Swimmers Co. operates a set of water parks with leisure facilities for families in Aqualandia. Recent earthquake and world financial crisis caused that number
of visitors in water parks dramatically dropped. Swimmers Co. estimates that the number of visitors will not increase back within the next 2 years and as a
result, Swimmers will make loss of 3 mil. EUR each year.
What should Swimmers Co. do in its financial statements in relation to this situation?
Assessment
Present obligation as a result of past event? No
Reliable estimate?
No Provision
=> Test for impairment
www.IFRSbox.com Example 4: Future operating losses IAS 37: Provisions
Except for water parks, Swimmers operate also 2 theme hotels in Aqualandia. Hotels are held under non-cancellable operating lease that expires in
3 years. Swimmers' managers estimate that due to overall decrease in number of visitors, hotels will make annual loss of 1 mil. EUR each year if
continuing operations. Swimmers may also prematurely terminate the lease but with penalty of 2 mil. EUR.
What should Swimmers Co. do in its financial statements in relation to this situation?
1. Assessment
Provision
NiceHome Co. runs 2 main divisions: production of wooden accessories and metal accessories. On 30 September 20X1, board of directors approved
formal restructuring plan that involves shifting some production away from metal accessories to wooden accessories due to current developments
of customers' preferences.
Managers have prepared details of restructuring plan and have publicly announced it on 30 November 20X1. An implementation of the plan should
start on 1 February 20X2 and complete 31 January 20X3.
Managers have estimated the costs of restructuring as follows:
1. Carrying amount of redundant machines for metal accessories production - 2 000 000 EUR, revenue from their sale (based on offer received
recently) - 1 300 000 EUR
2. New computers in accounting department - 50 000 EUR
3. Cost of retraining employees from metal accessories - 100 000 EUR
4. Cost of severance payments to redundant employees from metal accessories - 400 000 EUR
What should NiceHome do in its financial statements in relation to this situation?
Nothing Provision
Impairment of machines
Provision
Clean Electric Co., electricity producer, has brought into commission new nuclear power plant on 1 January 20X1. Its cost is 800 mil. EUR (provision for
decommissioning not included). Decommissioning experts have estimated that Clean Electric will have to spend 350 mil. EUR in total to remove the
station and clean-up the area. Decommissioning will last for 10 years and schedule of expenditures is shown in table below. All figures do not include
inflation and are expressed in 20X1 prices. External consultants advice that annual inflation is to be 3% p.a. in average and current market interest rate on
long-term bonds is 2% p.a.
What should Clean Electric Co. show in its financial statements in respect of decommissioning? (note - Clean Electric Co. applies cost model according to
IAS 16).
1. Calculation of provision
2. Accounting treatment
rovision for
move the
not include
interest rate on
l according to
www.IFRSbox.com Example 8: Change in decommissioning provision (IFRIC 1) IAS 37: Provisions
At the end of 20X7, Clean Electric Co. received license to operate power plant for extended time until the end of 20X25. With respect to this
change and due to new technologies available, experts adjusted their estimate of decommissioning expenses as shown in table below (in 20X7
prices).
Inflation and discount rate remain unchanged.
What should Clean Electric Co. show in its financial statements in respect of change in decommissioning provision?
1. Calculation of provision
2. Accounting treatment