Which statement about contingencies is correct?
A)If the future outcome is possible and reliably measurable,a provision is recorded.
B)If the future outcome is possible,but reliably measurable,no action is required.
C)If the future outcome is possible,but not reliably measurable,no action is required.
D)If the future outcome is possible,but reliably measurable,disclosure is required.

Question

Quizplus · Accepted Answer

If the future outcome of a contingency is possible but reliably measurable, disclosure is required in the financial statements. However, if the outcome is not reliably measurable, no action is required. If the outcome is both possible and reliably measurable, a provision may need to be recorded to account for the potential liability.

Which Statement About Contingencies Is Correct