The board of directors of Alaala-Pi Co. decided on December 15, 20x1 to wind up international operations in Country B and move them to Country C. The decision was based on a detailed formal plan of restructuring, which was conveyed to all workers and management personnel at the headquarters in Country A. The cost of restructuring the operations in Country B as per this detailed plan was P10M. Should Alaala-Pi recognize a provision on December 31, 20x1? Yes, because all the recognition criteria are met No, because the obligation has an improbable outflow No, because there is no present obligation as of December 31, 20x1 No, because the outflow cannot be reliably estimated
The board of directors of Alaala-Pi Co. decided on December 15, 20x1 to wind up international operations in Country B and move them to Country C. The decision was based on a detailed formal plan of restructuring, which was conveyed to all workers and management personnel at the headquarters in Country A. The cost of restructuring the operations in Country B as per this detailed plan was P10M. Should Alaala-Pi recognize a provision on December 31, 20x1? Yes, because all the recognition criteria are met No, because the obligation has an improbable outflow No, because there is no present obligation as of December 31, 20x1 No, because the outflow cannot be reliably estimated
Chapter1: Financial Statements And Business Decisions
Section: Chapter Questions
Problem 1Q
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The board of directors of Alaala-Pi Co. decided on December 15, 20x1 to wind up international operations in Country B and move them to Country C. The decision was based on a detailed formal plan of restructuring, which was conveyed to all workers and management personnel at the headquarters in Country A. The cost of restructuring the operations in Country B as per this detailed plan was P10M. Should Alaala-Pi recognize a provision on December 31, 20x1?
Yes, because all the recognition criteria are met
No, because the obligation has an improbable outflow
No, because there is no present obligation as of December 31, 20x1
No, because the outflow cannot be reliably estimated
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