01-30-2009, 01:54 PM
Hi,
on the occuring of the event, for which provision has created, the provision and the exceeding outflow of cash both shall be recorded in the relevent account.For instance the provision created for a law suit relating to the worders compensation will be transferer to the "Workers Compesation Account" .
The exceeding outflow shall also be recored as expense or in relevant account beside the amount of provision.If the actual expense or cost is less than the provision created the shortfall shall be added in retained earnings.
Awais Aftab
ACMA (Finalist)
