F10

Question 1

Sub events.When is a contingent liability recognized (accrued on FS’s)? At what amount?

Answer 1

• When its probable and estimable.
• If all amounts within a range of values are equally likely, then the lowest amount in the range is the measurement amount.

Question 2

Sub events: What is the difference between a contingent liability that is reasonably possible vs reasonably probable?

Answer 2

probable and estimable= must be recognized

possible and estimable= only footnote disclosure is required for “possible” loss