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New Regulations
Business risks-there is a risk that these regulations may not be complied with which could lead to fines and penalties.
What is the FS Risk? Correct me if I am wrong.
As a result this require a provision to be recognised or a contingent liability to be disclosed. There is a risk that no provision had been made and that liabilities are therefore understated and profit overstated or no contingent liability has been disclosed(if a reliable estimate cannot be made).
Thank you..
I don’t see a lot wrong with that. I suppose there’s also a potential contingent liability in the situation where, for example, the regulators are unsure about the fine detail of the application of the new regulations and the applicability of those regulations.
Whilst deliberation is taking place, a company may feel that there could be potential for them to face yet more fines or penalties but their legal advisor has suggested that there is only a 30% chance of further liability
OK?
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