338 / 488
Chapter
29 /
Provisions, Contingent Liabilities, and Contingent Assets (lAS 37)
ABC Inc. will actually carry out the re–
structuring (and as no constructive obliga–
tion has arisen). only disclose the restructur–
ing decision and the cost of restructur ing of
$2 million in footnotes to the financial state–
ments.
(b) Recognize a provision for restructuring
since the board of directors has approved it
and it has been announced in the headquar–
ters of ABC Inc. in Europe.
(c) Mention the decision to restructure and the
cost involved in the chairman's statement in
the annual report since it a decision of the
board of directors.
(d) Because the restructuring has not com–
menced before year-end, based on prudence,
wait until next year and do nothing in this
year's financial statements.
Answer: (a)
329