When does a proposed new law create an obligation?
AWhen first discussed
BWhen a bill is drafted
CWhen industry objects
DWhen enactment is sure
Answer & Solution
Correct answer: D. When enactment is sure
Where the details are not final, an obligation arises only when the law is virtually certain to be enacted as drafted.
Keep practising AS 29 Provisions and Contingencies
Browse all AS 29 Provisions and Contingencies questions for CA Inter, or explore more Accounting topics.
Related questions
Use of estimates in preparing a provision:A present obligation where outflow is not probable is classed as a:To whom can an obligation be owed?Which obligation exists independently of the entity's future actions?A restructuring plan creates an obligation only if it is meant to:Which is evidence that a restructuring plan has started to be implemented?An executory contract falls within the provisions rules only if it is:Depreciation and doubtful debt provisions are really: