Disclosure

In this lesson

1. 0:00 Provisions disclosure on financial statements
2. 0:30 Key disclosures required for provisions
3. 1:21 Contingent liabilities disclosure requirements
4. 1:50 Contingent assets disclosure guidance

About this lesson

You'll discover what information must be presented in the statement of financial position, profit and loss account, and supporting notes—and why these disclosures matter for giving users a complete picture of your organisation's obligations and potential exposures. This is essential knowledge for Financial Reporting and Strategic Business Reporting papers, where examiners test both your ability to recognise provisions and your understanding of how to communicate them clearly through financial statements. The lesson covers three key disclosure categories. For provisions, you must disclose the carrying amounts at the start and end of the period, new provisions made during the year, the nature and timing of obligations, uncertainty around outflows, and any expected reimbursements or recognised assets. For contingent liabilities—such as potential court settlements or countersuits—you disclose the nature of the liability, estimated financial impact where possible, uncertainty levels, and any reimbursement prospects. For contingent assets, you disclose whether inflows are probable, provide a brief description, and estimate the financial effect. Understanding these disclosure requirements ensures you can present a transparent view of financial risk and opportunity. In exam scenarios, examiners expect you to identify which items qualify as provisions, contingent liabilities, or contingent assets, and then articulate the correct disclosures for each. Mastering this distinction and the supporting note requirements will strengthen your grasp of how organisations communicate financial obligations to stakeholders.

Duration: 2m