Under Ind AS 37, a provision should be recognized when:
A. There is a possible obligation arising from past events.
B. It is probable that an outflow of resources will be required to settle a present obligation, and a reliable estimate can be made.
C. The amount of the obligation is contingent upon the occurrence of a future event.
D. The entity has a general business policy to repair damages to its reputation.
Answer: Option B
Solution (By JKSSB Mock Tests)
Ind AS 37 mandates that a provision is recognized only when there is a present obligation (legal or constructive) from a past event, an outflow of resources is probable, and a reliable estimate can be made.
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