A commitment is recognized when the amount can be reasonably estimated and the likelihood of loss is probable.

Name: A commitment is recognized when the amount can be reasonably estimated and the likelihood of loss is probable.
Brand: Quizplus
Rating: 4.8 (33 reviews)

Question

Quizplus · Accepted Answer

A commitment is not recognized as a liability on the financial statements. Instead, it is disclosed in the notes to the financial statements if it is significant. The statement describes the criteria for recognizing a contingent liability, not a commitment.

A Commitment Is Recognized When the Amount Can Be Reasonably