The Use of Artificial Intelligence to Determine Contingent Legal Liabilities Provisions.

Daniel Broby, Andrea Coulson, Viktor Dörfler

Research output: Working paper

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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 languageEnglish
PublisherUniversity of Strathclyde
Number of pages11
Publication statusPublished (in print/issue) - 25 Jun 2021

Publication series

NameAvailable at SSRN 3945406
PublisherUniversity of Strathclyde, Centre for Financial Regulation and Innovation

Bibliographical note

Funding information
The 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


  • IAS 37
  • Contingent liabilities
  • Artificial intelligence in accounting
  • legal provisions


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