Which of the following statements about provisions and contingencies is/are correct? 1
A、company should disclose details of the change in carrying amount of a provision from the beginning to the end of the year. 2 Contingent assets must be recognised in the financial statements in accordance with the prudence concept. 3 Contingent liabilities must be treated as actual liabilities and provided for if it is probable that they will arise.
A、3 only
B、2 and 3 only
C、1 and 3 only
D、All three statements are correct
A、company should disclose details of the change in carrying amount of a provision from the beginning to the end of the year. 2 Contingent assets must be recognised in the financial statements in accordance with the prudence concept. 3 Contingent liabilities must be treated as actual liabilities and provided for if it is probable that they will arise.
A、3 only
B、2 and 3 only
C、1 and 3 only
D、All three statements are correct
【参考答案及解析】
Contingent assets should not be recognised in the financial statements. However, they should bedisclosed if it is probable that the economic benefits associated with the asset will flow to the entity. If it becomes probable that the a transfer of economic benefits associated with a contingent liability will happen, then the contingent liability is no longer contingent and a liability should be recognised in the financial statements
Contingent assets should not be recognised in the financial statements. However, they should bedisclosed if it is probable that the economic benefits associated with the asset will flow to the entity. If it becomes probable that the a transfer of economic benefits associated with a contingent liability will happen, then the contingent liability is no longer contingent and a liability should be recognised in the financial statements