Provisions & Contingencies — ASC 450 vs IAS 37

Both frameworks recognize a liability for a probable, estimable loss — but “probable” means different things, and the measurement and discounting rules differ, so IFRS generally recognizes provisions earlier and at a different amount.

Area	US GAAP (ASC 450)	IFRS (IAS 37)
Recognition threshold	”Probable” = a high likelihood (~likely)	“Probable” = more likely than not (> 50%)
Measurement (range)	Accrue the low end if no amount in the range is better	Best estimate — expected value (large populations) or most-likely (single items)
Discounting	Limited	Required when the time-value effect is material
Onerous contracts	Largely no general model	Recognized under IAS 37

The lower IFRS threshold plus best-estimate measurement means provisions appear sooner and often at a higher amount than under US GAAP.

• Probability assessment — the threshold call.
• Best estimate — expected value vs most-likely amount.
• Discount rate and unwinding (IFRS).
• Onerous-contract identification (IFRS).

• SAP implementation: provisions postings; parallel ledgers carry the differing recognition/measurement — write-up forthcoming under SAP & Enterprise Systems.

An educational reference and original synthesis — not investment advice, and not a substitute for the standard or for professional accounting guidance. For authoritative measurement detail, consult ASC 450 / IAS 37 directly.