Yakub02
Banned
: Contingent liability
A contingent liability is either of the following:
A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.
OR A contingent liability is a present obligation that arises from past events but is not recognised because it is not probable that an outflow of economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability.
Contingent asset
A contingent asset is a possible asset that arises from past events whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.
Corporate Reporting Future repairs and major overhauls A provision cannot be recognised for the cost of future repairs or replacement parts unless the company has an obligation to incur the expenditure.
A company should capitalise expenditure incurred on replacement of an asset and depreciate this cost over its useful life. Normal repair costs are expenses that should be included in profit or loss as incurred.
A contingent liability is either of the following:
A contingent liability is a possible obligation that arises from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.
OR A contingent liability is a present obligation that arises from past events but is not recognised because it is not probable that an outflow of economic benefits will be required to settle the obligation or the amount of the obligation cannot be measured with sufficient reliability.
Contingent asset
A contingent asset is a possible asset that arises from past events whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity.
Corporate Reporting Future repairs and major overhauls A provision cannot be recognised for the cost of future repairs or replacement parts unless the company has an obligation to incur the expenditure.
A company should capitalise expenditure incurred on replacement of an asset and depreciate this cost over its useful life. Normal repair costs are expenses that should be included in profit or loss as incurred.
