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Commission Regulation (EC) No 1725/2003
of 29 September 2003
adopting certain international accounting standards in
accordance with Regulation (EC) No 1606/2002
of the European Parliament and of the Council
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Disclosure
84. For each class of
provision, an enterprise should disclose:
(a) the carrying amount at the
beginning and end of the period;
(b) additional provisions made
in the period, including increases to existing provisions;
(c) amounts used (i.e.
incurred and charged against the provision) during the period;
(d) unused amounts reversed
during the period; and
(e) the increase during the
period in the discounted amount arising from the passage of
time and the effect of any change in the discount rate.
Comparative information is not
required.
85. An enterprise should
disclose the following for each class of provision:
(a) a brief description of the
nature of the obligation and the expected timing of any
resulting outflows of economic benefits;
(b) an indication of the
uncertainties about the amount or timing of those outflows.
Where necessary to provide adequate information, an enterprise
should disclose the major assumptions made concerning future
events, as addressed in paragraph 48; and
(c) the amount of any expected
reimbursement, stating the amount of any asset that has been
recognised for that expected reimbursement.
86. Unless the possibility of
any outflow in settlement is remote, an enterprise should
disclose for each class of contingent liability at the balance
sheet date a brief description of the nature of the contingent
liability and, where practicable:
(a) an estimate of its
financial effect, measured under paragraphs 36 to 52;
(b) an indication of the
uncertainties relating to the amount or timing of any outflow;
and
(c) the possibility of any
reimbursement.
87. In determining which
provisions or contingent liabilities may be aggregated to form
a class, it is necessary to consider whether the nature of the
items is sufficiently similar for a single statement about
them to fulfil the requirements of paragraphs 85(a) and (b)
and 86(a) and (b). Thus, it may be appropriate to treat as a
single class of provision amounts relating to warranties of
different products, but it would not be appropriate to treat
as a single class amounts relating to normal warranties and
amounts that are subject to legal proceedings.
88. Where a provision and a
contingent liability arise from the same set of circumstances,
an enterprise makes the disclosures required by paragraphs 84
to 86 in a way that shows the link between the provision and
the contingent liability.
89. Where an inflow of
economic benefits is probable, an enterprise should disclose a
brief description of the nature of the contingent assets at
the balance sheet date, and, where practicable, an estimate of
their financial effect, measured using the principles set out
for provisions in paragraphs 36 to 52.
90. It is important that
disclosures for contingent assets avoid giving misleading
indications of the likelihood of income arising.
91. Where any of the
information required by paragraphs 86 and 89 is not disclosed
because it is not practicable to do so, that fact should be
stated.
92. In extremely rare cases,
disclosure of some or all of the information required by
paragraphs 84 to 89 can be expected to prejudice seriously the
position of the enterprise in a dispute with other parties on
the subject matter of the provision, contingent liability or
contingent asset. In such cases, an enterprise need not
disclose the information, but should disclose the general
nature of the dispute, together with the fact that, and reason
why, the information has not been disclosed.
Transitional provisions
93. The effect of adopting
this Standard on its effective date (or earlier) should be
reported as an adjustment to the opening balance of retained
earnings for the period in which the Standard is first adopted.
Enterprises are encouraged, but not required, to adjust the
opening balance of retained earnings for the earliest period
presented and to restate comparative information. If
comparative information is not restated, this fact should be
disclosed.
94. [deleted]
Effective date
95. This International
Accounting Standard becomes operative for annual financial
statements covering periods beginning on or after 1 July 1999.
Earlier application is encouraged. If an enterprise applies
this Standard for periods beginning before 1 July 1999, it
should disclose that fact.
96. [deleted]
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