Contingent assets need not be disclosed in the financial statements or in the notes if they are:

Question

Quizplus · Accepted Answer

Contingent assets are not recognized in financial statements because they are uncertain. They are only disclosed in the notes to the financial statements when the inflow of economic benefits is probable. If a contingent asset is possible but not probable, it is not disclosed at all, as there is too much uncertainty regarding its realization.

Contingent Assets Need Not Be Disclosed in the Financial Statements