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Explain why each of the following is recognised as a provision in the statement of financial position (balance sheet) of a telecommunications company:
(a) On 15 December Year 2, the Group announced a major redundancy programme. Provision has been made at 31 December Year 2 for the associated costs. The provision is expected to be utilised within 12 months.
(b) Because of the redundancy programme, some properties have become vacant. Provision has been made for lease payments that cannot be avoided where subletting is not possible. The provision will be utilised within 15 months.
(c) There is a legal claim against a subsidiary in respect of alleged breach of contract. Provision has been made for this claim. It is expected that the provision will be utilised within 12 months.
Companies the full disclosure principle should report what and which of the following post-balance-sheet events would require adjustment of the accounts before issuance of the financial statements?
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