The Role of Professional Judgment in the Recognition of Provisions: An Analysis Based on IAS 37

Abstract

This paper examines the role of professional judgment in the recognition and evaluation of provisions in accordance with IAS 37. In conditions of economic uncertainty, provisions require estimations based on probabilities and incomplete information. The research aims to analyse how professional judgment influences the application of IAS 37, particularly in assessing the existence of obligations, the probability of outflows of resources, and the measurement of provisions. The study is based on normative and theoretical analysis, supported by practical examples. The results show that the accounting treatment of provisions depends significantly on professional reasoning, which directly affects the quality and reliability of financial information. CZU: [657.372.2:657.411.6]:006.32; JEL: M41