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Construction Industry Audit Techniques Guide (ATG)

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Provisions are recognized when the Group has a present obligation as a result of a past event, it is probable that an outflow of resources will be required to settle the obligation and a reliable estimate can be made of the amount of the obligation.This obligation may be legal or constructive, deriving from inter alia regulations, contracts, normal practices or public commitments that lead third parties to reasonably expect that the Group will assume certain responsibilities.The amount of the provision is determined based on the best estimate of the outflow of resources required to settle the obligation, bearing.

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