Are "contingent assets & liabilities" still being tested in exams?

Hi,

I guess you have posted this in the wrong forum… You may want to post this on the F7 (FR) forum.

Any case, if you want to know whether or not something is going to be tested in exam just go ahead and check the Syllabus and Study Guide.
Anything and everything that is mentioned in the Syllabus and Study Guide can be tested.
However, if it is explicitly mentioned that the particular topic has been ‘deleted’ then it won’t be tested.

But to answer your question specifically, contingent assets and liabilities are a part of IAS37… Not much about them though. I have seen mainly MCQs regarding how and whether or not they should be recorded if they are probable, possible, certain or remote chances.

Hope that helps.

Oh yes yes…sorry my bad. My sincere apologies on that note. Gets a bit confusing when you have two subjects with similar topics.

I suppose you must be referring to chapter 27, if i am not wrong?

Well, if you see the syllabus and study guide of AA under

-the syllabus area D.AUDIT EVIDENCE
-sub-heading – AUDIT SPECIFIC ITEMS

you will see the following:
“f) Non-current liabilities, provisions and contingencies[2]
i) evidence in relation to non-current liabilities, and
ii) provisions and CONTINGENCIES

mentioned on page 16 of https://www.accaglobal.com/content/dam/acca/global/PDF-students/acca/f8/studyguides/aa-sg-sept18-jun19.pdf )

So as you can read, it is mentioned in the syllabus and going back to what I had said in my earlier post…

@jetavi said:

Anything and everything that is mentioned in the Syllabus and Study Guide can be tested.
However, if it is explicitly mentioned that the particular topic has been ‘deleted’ then it won’t be tested.

Just for an overview (something pretty much the same as what have been studied in FR):

Contingent liabilities (potential liability that may occur depending on the outcome of an uncertain future event, for example in the case of a lawsuit) have to be audited.

The auditor will have to consider the operations of the business to see any contingencies, given they are uncertain and related to the future.

Checking on past contingencies and their outcome will also be informative.

Materiality will be important, let’s say, for instance; a court case for $1500 is unlikely to be relevant to a company with profits of $30m. The auditor will have to decide and analyse the materiality.

For the disclosure, the probability of the liability is important.

If possible then the contingent liability should be disclosed with a brief description of:

-an estimate of the financial effect of the contingent liability
-nature
-timing
-uncertainties
-assumptions
-reimbursement, if any.

Contingent asset is also similar to the above; the only difference would be that only if it is CERTAIN then it will disclosed.

Is it clear now?