According to IAS 37, how should contingent assets be recognized?
A) They should be disclosed in the notes to the financial statements if the inflow of resources is probable.
B) They should be recognized like any other asset, with a debit to "contingent assets."
C) They should not be disclosed anywhere in the financial statements due to their uncertainty.
D) They should only be disclosed in the notes to the financial statements if the inflows of resources are virtually certain.

Question

Quizplus · Accepted Answer

According to IAS 37, contingent assets should not be recognized as assets on the financial statements as their realization is uncertain. However, if it is probable that the inflow of economic benefits will occur, disclosure of the contingent asset should be made in the notes to the financial statements. Therefore, option A is the correct answer.

According to IAS 37, How Should Contingent Assets Be Recognized