Contingent asset
A contingent asset is a possible asset arising from past events whose existence will be confirmed by uncertain future events not wholly within the entity’s control. It is not recognised while contingent. Disclose it when an inflow of economic benefits is probable. When the inflow becomes virtually certain, recognise the asset because it is no longer contingent.
Worked example
A business pursuing a damages claim may disclose the possible recovery if success is probable, without recognising a receivable prematurely.
Common mistake
Do not use the same recognition threshold as for a provision: prudence produces deliberately different treatment of uncertain gains and losses.
Where it appears in your exams
| Qualification | Exam | Relationship | Period |
|---|---|---|---|
| ACCA | FA | Direct | September 2026–June 2027 |
| ACCA | FR | Direct | Official assessment-window verification pending |
| ACCA | K1 | Direct | July 2027–August 2028 |
| ACCA | SBR | Direct | Official assessment-window verification pending |
| CIMA | BA3 | Direct | Official assessment-window verification pending |
| CIMA | F2 | Direct | Official assessment-window verification pending |
| FIA | FFA | Direct | September 2026–June 2027 |