A provision is recognised when it is more likely than not (greater than 50 per cent chance)

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A provision is recognised when it is more likely than not (greater than 50 per cent chance) that an outflow of economic benefits will be needed to satisfy the obligation. This threshold established in IAS 37 represents a lower recognition threshold than is required by the equivalent US accounting standard. When considering a lawsuit in which the company is the defendant, can you see a potential problem having to adopt this lower threshold?

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