What is a "contingent asset?"
A)There is no such thing,in either IASB standards or U.S.GAAP,as a "contingent asset."
B)This is an asset that has been put up as collateral against a loan.
C)This is a possible inflow of resources arising from a future activity.
D)It is a probable asset,arising from past events ,whose existence is yet to be confirmed definitively by a future event.

Question

Quizplus · Accepted Answer

A contingent asset is a possible asset that arises from past events, and its existence will be confirmed by a future event. It is not a certain asset or a collateral against a loan (options B and C). While it is not explicitly defined in the accounting standards, it is mentioned as a possibility and requires disclosure in the financial statements.

What Is a "Contingent Asset