Author(s): Santos, Cristiana ; Eugénio, Teresa Cristina Pereira ; Santos, Vitor ; Morais, Ana ; Seco, Alexandra
Date: 2026
Origin: International Journal of Business Innovation
Subject(s): Provisions; Contingent Liabilities; IAS 37; Financial Acounting; Portugal
Provisions and contingencies are one of the topics involving the calculation of estimates and the need to exercise professional judgement, thus playing an important role in the work of the accountant. This study aims to identify the determinants of the recognition of provisions by Portuguese companies and to assess the information disclosed as well as the degree of compliance with accounting standards (IAS 37). The first objective focuses on the individual financial statements of Portuguese companies for the year 2021. The data were collected from the Sabi database. The following variables were analysed: sector of activity; firm size; the influence of legal proceedings and audit status. The second objective focuses on Portuguese listed companies, using their annual reports for 2021. The information was collected through content analysis. Descriptive analyses and statistical tests were conducted to obtain the results of the study. It was concluded that Portuguese companies still have a long way to go in terms of the recognition and disclosure of provisions and contingent liabilities. This study contributes to the literature by analysing a particularly important issue in financial accounting, as it involves the use of estimates and requires professional judgement. Accordingly, it is essential to understand the determinants of provision recognition. Furthermore, this study encompasses both listed and unlisted companies. It is also worth noting that knowledge of compliance with accounting standards is of primary interest not only to internal and external stakeholders but also to financial institutions and others interested in financial information.
