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Forums › Ask ACCA Tutor Forums › Ask the Tutor ACCA FR Exams › Q50 – FORMATT – Bpp kit
Sir in part B of the question it states that an Asset has been written down to its recoverable amount and the impairment been recognized in P/L and the “Government has indicated that it may compensate the company for any loss in value of the assets upto 20% of the impairment loss.
The answer has correctly stated that an asset shouldn’t be recognized in SOFP as it isn’t virtually certain that the compensation will be received since government has merely indicated that it may compensate.
My doubt is that at least a contingent asset needs to be disclosed right? The answer doesn’t say anything about contingent asset.
Am i right?
Hi,
A contingent asset is disclosed if the likelihood is probable, and here it only looks like it is possible as it says “may compensate” so no disclosure is made.
Thanks