Contingencies

Question 1

Criteria to record a contingent provision

Answer 1

1. The entity has a present obligation as result of a past event
2. It is considered probable that the entity will have an outflow of economic resources (if over 50% = probable)
   If deemed probable go to 3
3. The entity is able to make a reasonable estimate of the outflow

Question 2

If the provision is probable but not measurable?

Answer 2

Disclose

Question 3

If the provision is possible?

Answer 3

Disclose

Question 4

If the provision is remote?

Answer 4

Nothing

Question 5

Contingent Assets

Answer 5

Cannot be recorded unless 100% certain

May disclose if likely but not measurable or probable.

Question 6

Measurement of contingent liability to record

Answer 6

The most likely amount (IFRS)

The min amount (ASPE) & disclose other possible amounts.