argument, 20 marks) Question Two: Provisions are particular kinds of liabilities. It therefore follows that provisions should be recognized when the definition of a liability has been met. The key requirement of a liability is A present obligation and thus this requirement is critical also in the context of the recognition of a provision. IAS 37 Provisions, Contingent liabilities and Contingent Assets deals with this area. 1) Explain the definition of provisions and why there was a need for detailed guidance on accounting for provision? (10 marks) 2) Explain the circumstances under which a provision should be recognized in the financial statement according to IAS 37 Provisions, Contingent liabilities and Contingent Assets. (10 marks)