A contingent liability is recognized when any likelihood of loss exists and the amount can be reasonably estimated.

Name: A contingent liability is recognized when any likelihood of loss exists and the amount can be reasonably estimated.
Brand: Quizplus
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Question

Quizplus · Accepted Answer

A contingent liability is recognized only when it is probable that a loss will occur and the amount can be reasonably estimated. If the likelihood is not probable, it is disclosed in the notes to the financial statements, not recognized.

A Contingent Liability Is Recognized When Any Likelihood of Loss