This Standard shall be applied by all entities in accounting for provisions, contingent liabilities and contingent assets, except:

(a) those resulting from executory contracts, except where the contract is onerous; and

(b) [deleted]

(c) those covered by another Standard.


AusCF entities are:

(a) not-for-profit entities; and

(b) for-profit entities that are not applying the Conceptual Framework for Financial Reporting (as identified in AASB 1048 Interpretation of Standards).

For AusCF entities, the term ‘reporting entity’ is defined in AASB 1057 Application of Australian Accounting Standards and Statement of Accounting Concepts SAC 1 Definition of the Reporting Entity also applies. For-profit entities applying the Conceptual Framework for Financial Reporting are set out in paragraph Aus1.1 of the Conceptual Framework.


This Standard does not apply to financial instruments (including guarantees) that are within the scope of AASB 9 Financial Instruments.


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. This Standard does not apply to executory contracts unless they are onerous.




When another Standard deals with a specific type of provision, contingent liability or contingent asset, an entity applies that Standard instead of this Standard. For example, some types of provisions are addressed in Standards on:

(a) [deleted]

(b) income taxes (see AASB 112 Income Taxes);

(c) leases (see AASB 16 Leases). However, this Standard applies to any lease that becomes onerous before the commencement date of the lease as defined in AASB 16. This Standard also applies to short-term leases and leases for which the underlying asset is of low value accounted for in accordance with paragraph 6 of AASB 16 and that have become onerous;

(d) employee benefits (see AASB 119 Employee Benefits);

(e) insurance contracts (see AASB 4 Insurance Contracts, AASB 1023 General Insurance Contracts, and AASB 1038 Life Insurance Contracts). However, this Standard applies to provisions, contingent liabilities and contingent assets of an insurer, other than those arising from its contractual obligations and rights under insurance contracts within the scopes of AASB 4, AASB 1023 or AASB 1038;

(f) contingent consideration of an acquirer in a business combination (see AASB 3 Business Combinations); and

(g) revenue from contracts with customers (see AASB 15 Revenue from Contracts with Customers). However, as AASB 15 contains no specific requirements to address contracts with customers that are, or have become, onerous, this Standard applies to such cases.




This Standard defines provisions as liabilities of uncertain timing or amount. In some countries the term ‘provision’ is also used in the context of items such as depreciation, impairment of assets and doubtful debts: these are adjustments to the carrying amounts of assets and are not addressed in this Standard.


Other Standards specify whether expenditures are treated as assets or as expenses. These issues are not addressed in this Standard. Accordingly, this Standard neither prohibits nor requires capitalisation of the costs recognised when a provision is made.


This Standard applies to provisions for restructurings (including discontinued operations). When a restructuring meets the definition of a discontinued operation, additional disclosures may be required by AASB 5 Non-current Assets Held for Sale and Discontinued Operations.