Section A

Which of the following statements regarding the recognition of provisions under IAS 37 is correct?

A provision should be recognized for future operating losses if they are highly probable.

A provision should be recognized when there is a present obligation as a result of a past event, an outflow of resources is probable, and a reliable estimate can be made.

A contingent liability must always be recognized as a provision in the statement of financial position.

A provision can be recognized based solely on management's intention to carry out a restructuring, even if no public announcement has been made.