In order to recognize a provision [and record it on the books as opposed to only disclosing it in footnotes], certain conditions [as discussed on my previous post: Recognition and Measurement of Provision] need to be satisfied. However, when one of the... 

Prior to the promulgation of IAS 37, in the absence of clear-cut rules of recognition and measurement, entities could charge huge provisions to the income statement (often referred to as big bath provisions) and thereby manipulate earnings or financial...