Future operating losses Natural disasters – Miscellaneous considerations
Entities may incur other losses directly or indirectly related to a natural disaster. An entity may anticipate having future operating losses for a period of time after a natural disaster. For example, an entity may have repair costs, lost revenue due to plant closures or losses due to an overall decline in the economy. Additional costs might be incurred in renting alternative production facilities, providing transport or accommodation for employees or outsourcing business functions.
Future operating losses and costs do not meet the definition of a liability (because they do not arise from a present obligation resulting of a past event), and therefore are not recognised until incurred.
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