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May I ask if Treatment of Contingent liability and asset Table at bottom of lecture note in Chapter 27 is for before period or after period end?
Also I listed treatment of Contingent liability and asset per testing, can you have a look if it’s correct:
Contingent liability Treatment
Probable outflow of resource BEFORE period end Establish a provision
Possible outflow of resources BEFORE period end Disclose details in notes
Probable outflow of resource AFTER period end Consider disclosing details in notes if material
Remote Likelihood of outflow of resources No disclosure of any kindContingent Asset Treatment
Virtually certain inflow of benefits AFTER period Not Contingent Assets, so no adj or disclosure required
Probable inflow of resource BEFORE period end Disclose details in note
Not probable inflow of resources No disclosure of any kind
Many thanks in advanceTo be a contingent asset/liability the event must have happened before year end but its outcome (and inflow or outflow of funds) will not be known until after year end.
If outflow of funds is
Remote: ignore
Possible: note
Probable: recognise as a liabilityIf inflow is
Remote or possible: ignore
Probable: note
Virtually certain: recognise as an asset.Listen to the lecture.
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