On the reporting of liabilities where a range of values exists as a possible outcome,IFRS require which of the following points to be recorded as a provision,if the outcome is probable?
A)Low end of the range
B)High end of the range
C)Midpoint of the range
D)IFRS present no specific guidance as to this point.

Question

Quizplus · Accepted Answer

According to IFRS, the midpoint of the range should be recorded as a provision if the outcome is probable. This is because the midpoint reflects the best estimate of the potential liability, which is the amount that is most likely to occur. Choosing the low or high end of the range may result in an overestimation or underestimation of the liability, respectively. IFRS provides specific guidance for recording provisions based on the range of possible outcomes to ensure that financial statements accurately reflect the potential liability.

On the Reporting of Liabilities Where a Range of Values