What is an onerous contract How are onerous contracts accounted for?
Besides, what is an onerous contract provision?
An onerous contract is a contract in which the aggregate cost required to fulfill the agreement is higher than the economic benefit to be obtained from it. Another example of an onerous contract is when a lessee is still obligated to make payments under the terms of an operating lease, but is no longer using the asset.
Furthermore, what do u mean by provision? Definition: A provision is an amount set aside for the probable, but uncertain, economic obligations of an enterprise. A provision is an amount that you put in aside in your accounts to cover a future liability. When accounting, provisions are recognized on the balance sheet and then expensed on the income statement.
Also, what is onerous law?
A near synonym is burdensome. In legal usage, onerous describes a contract or lease that has more obligations than advantages. Onerous derives from Middle English, from Old French onereus, from Latin onerōsus, from onus "burden." In English, an onus is a task or duty that is onerous, or very difficult.
What is a contingent asset?
A contingent asset is a possible asset that may arise because of a gain that is contingent on future events that are not under an entity's control. According to the accounting standards, a business does not recognize a contingent asset even if the associated contingent gain is probable.