Accounting for Provisions and Contingencies in the Accounting Standardisation System for Public Administrations

Abstract

Accounting plays a crucial role in supporting, collaborating and coordinating the various players, including stakeholders and citizens, in decision-making processes. IPSAS 19 - Provisions, contingent liabilities and contingent assets, issued by the International Public Sector Accounting Standards Board (IPSASB), aims to establish definitions for provisions, contingent liabilities and contingent assets, identify the circumstances for recognizing provisions, define measurement criteria and specify the necessary disclosures. Public Accounting Standard (NCP) 15 - Provisions, Contingent Liabilities and Contingent Assets of the Accounting Standardization System for Public Administrations (SNC-AP), approved by Decree-Law 192/2015 of September 11, is based on IPSAS 19.
Innovations in the field of public accounting, particularly with regard to provisions, contingent liabilities and contingent assets, are addressed by NCP 15. In the case of provisions, these are reflected in the financial statements, namely the Balance Sheet and Income Statement, while contingent liabilities and assets are disclosed, in certain circumstances, in the notes to the accounts.