Restructuring

PAS 37

Restructuring

Program that is planned and controlled by management

Material changes in either Scope of the business or The manner of conducting the business

Constructive obligation

Detailed formal plan Identification of details (par. 72)

Valid expectation in those affected Implementation of plan has started or Main features have been announced to those

affected

“Sufficiently specific current statement”

Par. 73: A public announcement of a detailed plan = constructive obligation to restructure

Gives rise to a valid expectation if Announced to those affected Sufficient details

“Valid expectation”, par. 74

Implementation planned to begin ASAP and

To be completed in a timeframe that makes significant changes unlikely

“Valid expectation”, par. 74

Valid expectation is unlikely if Long delay before restructuring begins or Restructuring will take an unreasonably

long time

Par. 75 Constructive obligation

Management or board decision to restructure is made before ERP gives rise to a constructive obligation at ERP if Implementation of plan has started or Announcement of main features to those affected

is made in a “sufficiently specific manner to raise a valid expectation” that restructuring will be carried out

Disclosure under PSA 10

Implementation or announcement is made after ERP, discloure is required if Restructuring is material and Non-disclosure could influence economic

decisions of users

Provision

Includes only direct expenditures arising from the restructuring which are those that are both Necessarily entailed by the restructuring

and Not associated with the ongoing activities

of the entity.