Final answer:
The appropriate discount rate for measuring a provision according to IAS 37 is a pre-tax rate reflecting the current market time value of money and risks specific to the liability, to determine the present discounted value of future payments.
Step-by-step explanation:
According to IAS 37 Provisions, Contingent Liabilities and Contingent Assets, the appropriate discount rate for measuring a provision is a pre-tax rate that reflects the current market assessment of the time value of money and the risks specific to the liability. This means that the discount rate should take into account not only the general time value of money, as reflected by risk-free rates like those on national government bonds, but also the specific risks and uncertainties associated with the liability in question, which may not be captured by the yields on high-quality corporate bonds.
The discount rate is critical to calculate the present discounted value of a future payment or series of payments, determining what amount would be equivalent in today's terms to a certain future sum, considering the potential capital gains, opportunity cost, dividends, and any other relevant factors.