Accounting Fundamentals

Contingent liability

A possible obligation that is disclosed but not recognised.

A possible obligation whose existence depends on uncertain future events, or a present obligation that is not recognised because an outflow is not probable or cannot be reliably measured.

Passende Übungsfragen

☝️ Single Under IAS 37, when must a provision be recognised?
Only when a court order has been issued
Whenever management expects to incur a cost in the future
When an outflow is merely possible and the amount cannot be measured
When there is a present obligation from a past event, an outflow of economic benefits is probable, and the amount can be reliably estimated
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