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AS 29 query

Sir, we know that as per AS 29 "obligation" is a duty or responsibility to act in a certain way arising from binding contracts, STATUTE, business practices or customs to maintain good relationship. The author of this scanner writes that "even a legal requirement does not require the company to make a provision. Doesnt the author's answer contrast with AS 29's definition? Please share your opinion, Sir.

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Kumarjit Dey

Kumarjit Dey

CA Inter

4K+

08-Nov-20 00:54

25

Answers (2)

Best Answer

Actually the point there is not regarding just obligation it is of present obligation and hence u don't have present obligation occurring from past events not future events. And hence I think the author is right


Satya  Shashank

Satya Shashank

CA Inter

13K+

08-Nov-20 11:19

Actually the point there is not regarding just obligation it is of present obligation and hence u don't have present obligation occurring from past events not future events. And hence I think the author is right

Yes as per AS 29 "present" refers to an obligation which is IN EXISTENCE AS BS DATE and it is PROBABLE (more likely than not) based on the evidence available on the balance sheet date. So yes, you and author are correct. I never doubt it the author in the first place but had to clarify my doubt, hence asked. Thanks for clarifying.


Kumarjit Dey

Kumarjit Dey

CA Inter

4K+

08-Nov-20 12:45

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