Contingencies Flashcards
1
Q
when to recognize contingent gain or loss ?
A
A- contingent gain could not be recognized until settled - only footnote disclosure
B-Contingency Loss recognized as following :
-Probable and could be reasonably estimated: recognize JE
-Likely : Footnotes
-Remote : ignore
2
Q
What is the difference between US GAAP AND IFRS regarding estimating contingent liability ?
A
If the amount of contingent loss and liability can not be reasonably estimated then GAAP CHOOSE THE MINIMUM IN RANGE BUT IFRS CHOOSES THE MIDPOINT
3
Q
When not to recognize contingent loss ?
A
When its only possible to occur only disclosure footnotes is required
