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Provisions, contingent liabilities and contingent assets

Disclosure – contingent liabilities and

assets

3.1 Accounting for contingent liabilities and assets

Per IAS 37 Provisions, contingent liabilities and contingent assets, contingent
liabilities and contingent assets are NOT recognised in the financial statements

No double entry is posted.

They are:

 DISCLOSED in the notes to the financial statements.

What is a contingent liability?

A contingent liability is an uncertain liability with:

 a POSSIBLE chance of outflows of economic benefit.

What is a contingent asset?

A contingent asset is an uncertain asset with:

 a PROBABLE chance of inflows of economic benefit.

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