A liability should only be recognised in the financial statements when: (i)reserves have been set aside by the entity
(ii)the amount can be measured reliably
(iii)it is probable that the future sacrifice of economic benefits will be required.
A) (i)and (ii)only
B) (i)and (iii)only
C) (ii)and (iii)only
D) (i),(ii)and (iii).

Question

Quizplus · Accepted Answer

A liability is recognized when it can be measured reliably and it is probable that an outflow of resources will occur. Reserves being set aside is not a requirement for liability recognition.

A Liability Should Only Be Recognised in the Financial Statements