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ACCA F3 IAS 37 Provisions, Contingent Liabilities and Contingent Assets
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In opentuition is there any exam kit questions to describe?
I am not sure what you mean. There are short online tests for each chapter, but you need to buy a Revision Kit from one of the ACCA approved publishers – they have lots of exam standard questions to practice.
If you are having a problem with any of the questions in an exam kit, then ask in the Ask the Tutor Forum (not as a comment on a lecture).
Thanks for the lectures, finding them a terrific help : )
And thank you for your comment 🙂
Hi Sir, May I ask for the notes provided,
Contingent Liabilities
These are disclosed as notes to the FS (but not accrued) unless the likelihood of payment is remote (50%) then it should be recognized in FS.
I am a bit confused with this part.
Thanks you sir
Sorry for typing error. “unless the likelihood of payment is PROBABLE (>50%) then it should be recognized in FS”
If the likelihood is probably then we show them in the financial statements – we treat the amount in the same way as we treat accruals.
hi
May i ask you sir, why contingent asset is owing?
But I give an example in the lecture!
Maybe we have taken a supplier to court because the sent us poor quality material and we want our money back. So, depending on what happens in course they might owe us money.
Thank you very much!
You are welcome 🙂
Sir, please why do we record a contingent liability as a provision(owing) though we said contingent liability is different from a provision?
A provision is a liability of uncertain timing or amount.
A contingent liability (if probable) is one example of this.
Thank you. Is my first time doing accounting, but with your help and that of this site, am covered.
You are welcome 🙂
Sir, What I understood is when a contingent liability is probable (>50) it will treated as provision. Right?
Right 🙂
Hello sir
Recoverability of liquidated debt is contingency or not?
a contingent asset
What’s the numerical assumptions of as remote, possible, probable and virtual certain?
They are explained the lecture and shown as a table in the lecture notes!
<5%
5% but <50%
50% but <95%
95% – 100%
Dear sir,
In practice question 5, the lawyer advises June ltd that probability of losing the case is 60% and the company in result would have to pay $100,000 to customer. Fees of lawyer is $10,000.
According to detials in note, i guess the treatment should be,
Expense: lawyer fees $10,000.
Provision: &100,000
But right answer given in question quiz is 100,000.
Could you please explain how to treat statement of profit and loss, and statement of financial position in this case.
Very much appreciated for your answers provided to all comments
sorry i made a mistake. right answer given in quiz is total expense of $110,000
The lawyers fees are certain so we must accrue 10,000. The 100,000 is probable, so we must provide.
So total expense is 110,000 and total liability is 110,000.
very good it helped me a lot to understand the 4 differences!! very well done thank you!