Liabilities and Hedge Accounting

• legal (arising from a contract)

• constructive (arising from established pattern of past practices)

1. present obligation as a result of past event

2. probable outflow of ressources will be required to settle the obligation

3. amount of obligation can be realiably estimated

always in P&L

• initial recognition: expense in P&L, provision liability +

• reversal: income in P&L, provision liability -

• utilisation: nothing in P&L, provision liability -

• interest cost: expense in P&L