Accounting considerations related to COVID-19 — IAS 37 and onerous contracts provisions

Published on: 28 Apr 2020

This video discusses onerous contracts provisions related to COVID-19. At the inception of an executory contract, both parties to the contract expect to receive benefits that are equal to or greater than the costs to be incurred under the contract. Because of the impacts of COVID-19, unavoidable costs of meeting the obligations under the contract may exceed the benefits expected to be received, resulting in an onerous contract. IAS 37 Provisions, Contingent Liabilities, and Contingent Assets requires recognition of a provision in respect of an onerous contract.

This video is part of our series of videos on accounting considerations with regard to COVID-19.

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