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Hi sir,
For part d
Idid undatand that this couldnt be a provision.
But am not ok w the fact that its a contingent liability?
1) it should be depending on market views and experts ? And here its estimate from william to be 4 m?
2) more likely than not that no outflow will occur ?
Of no outflow so no contingent liability?
3) is everytime there is a sue ,,, should be a provison or contingent liability?
Plz clarify the above issues
Thanks v much
It is assessed for the subsidiary’s financial statements in accordance with IAS 37 – the Q tells us that it’s a contingent liability (i.e. considered possible rather than probable).
It is assessed for the consolidated financial statements in accordance with IFRS 3 – “contingent liabilities assumed in a business combination that are a present obligation and can be measured reliably are recognised”. Although the Q states that it is “more likely than not that NO outflow will occur” (a rather tortuous way of saying that it is not probable/only possible – this is irrelevant.
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