Abstract
We suggest how Artificial Intelligence (AI) can help us make more accurate legal liability provisions under International Accounting Standards. International Financial Reporting Standards provide considerable guidance on how uncertain legal events should be recognized on the balance sheet. The process is subjective and, we argue, a more qualitative approach would be beneficial. We recommend the use of Artificial Intelligence to get a tentative outcome and a more reliable liability assessment for use in financial statements. This would provide a more true and fair view of the outcome of disputes. We discuss the theoretical and practical issues raised by using Artificial Intelligence to value provisions and propose a way of applying it to calculations of provisions under IAS 37.
Original language | English |
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Publisher | University of Strathclyde |
Number of pages | 11 |
DOIs | |
Publication status | Published (in print/issue) - 25 Jun 2021 |
Publication series
Name | Available at SSRN 3945406 |
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Publisher | University of Strathclyde, Centre for Financial Regulation and Innovation |
Bibliographical note
Funding informationThe University of Strathclyde is a leading international technological university that
has made Fintech one of its strategic clusters. The authors wish to thank accountants Johnson Carmichael and lawyers Pincent Masons for their advice
and support for this research
Keywords
- IAS 37
- Contingent liabilities
- Artificial intelligence in accounting
- legal provisions