| 21.1 | This section applies to provisions (ie liabilities of uncertain timing or amount), contingent liabilities and contingent assets except those provisions covered by other sections of this FRS. Where those other sections contain no specific requirements to deal with contracts that have become onerous, this section applies to those contracts. [AMD 450] |
| 21.1A | This section applies to financial guarantee contracts unless: |
| (a) | an entity has chosen to apply IAS 39 Financial Instruments: Recognition and Measurement and/or IFRS 9 Financial Instruments to its financial instruments (see paragraphs 11.2 and 12.2); or |
| (b) | an entity has elected under FRS 103 to continue the application of insurance contract accounting. [AMD 451] |
| 21.1B | This section does not apply to: |
| (a) | financial instruments (including loan commitments) that are within the scope of Section 11 Basic Financial Instruments or Section 12 Other Financial Instruments Issues; |
| (b) | insurance contracts (including reinsurance contracts) that an entity issues and reinsurance contracts that the entity holds, or financial instruments issued by an entity with a discretionary participation feature that are within the scope of FRS 103; or |
| (c) | executory contracts (ie contracts under which neither party has performed any obligations or both parties have partially performed their obligations to an equal extent) unless they are onerous contracts. [AMD 452] |
| 21.2 | [Moved to paragraph 21.1B(c)] [AMD 453] |
| 21.3 | The word 'provision' is sometimes used in the context of such items as depreciation, impairment of assets, and uncollectible receivables. Those are adjustments of the carrying amounts of assets, rather than recognition of liabilities, and therefore are not covered by this section. |
| AMD 450 Amendment Paragraph 21.1 amended by Amendments to FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland – Triennial review 2017 – Incremental improvements and clarifications (issued December 2017) Effective date 01/01/2019 Previous text 21.1 This section applies to all provisions (ie liabilities of uncertain timing or amount), contingent liabilities and contingent assets except those provisions covered by other sections of this FRS. Where those other sections contain no specific requirements to deal with contracts that have become onerous, this section applies to those contracts. |
| AMD 451 Amendment Paragraph 21.1A(b) amended by Amendments to FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland – Triennial review 2017 – Incremental improvements and clarifications (issued December 2017) Effective date 01/01/2019 Previous text (b) an entity has elected under FRS 103 Insurance Contracts to continue the application of insurance contract accounting. |
| AMD 452 Amendment Paragraph 21.1B amended by Amendments to FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland – Triennial review 2017 – Incremental improvements and clarifications (issued December 2017) Effective date 01/01/2019 Previous text 21.1B This section does not apply to financial instruments (including loan commitments) that are within the scope of Section 11 Basic Financial Instruments and 12 Other Financial Instruments Issues. This section does not apply to insurance contracts (including reinsurance contracts) that an entity issues and reinsurance contracts that the entity holds, or financial instruments issued by an entity with a discretionary participation feature that are within the scope of FRS 103 Insurance Contracts. |
| AMD 453 Amendment Paragraph 21.2 amended by Amendments to FRS 102: The Financial Reporting Standard applicable in the UK and Republic of Ireland – Triennial review 2017 – Incremental improvements and clarifications (issued December 2017) Effective date 01/01/2019 Previous text 21.2 The requirements in this section do not apply to executory contracts unless they are onerous contracts. Executory contracts are contracts under which neither party has performed any of its obligations or both parties have partially performed their obligations to an equal extent. |
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