The objective of IAS 37 is to ensure that provisions, contingent liabilities, and contingent assets are recognized based on appropriate criteria and measured using appropriate bases. Furthermore, the standard aims to ensure that the notes to financial statements provide sufficient information so that users can understand the nature, timing, and amount of any provisions, contingent liabilities, and contingent assets. The key underlying principle is that a provision should be recognized only when a liability exists; accordingly, planned future expenditures are not recognized as provisions or contingencies, even if the board of directors has authorized them.
IAS 37 Provisions, Contingent Liabilities and Contingent Assets — 2011
For a more comprehensive introduction to the adoption of IFRSs, see the online course, IAS 36/IAS 37. You must be registered to access and purchase the course.
Further resources on IFRS/IAS
Other IFRS/IAS articles and Professional Development Courses on PD Net