ACCA FA · Chapter 8 · Question 9 of 10
Under IAS 37, what is the required treatment of a contingent liability where the possibility of an outflow of economic benefits is remote?
Test yourself: pick an answer
Reveal answer & explanation
Correct answer: B) No recognition and no disclosure
Explanation
If the possibility of an outflow is remote, IAS 37 requires neither a provision nor disclosure. Disclosure is required where an outflow is possible, and a provision where it is probable and can be reliably estimated.
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