Skip to content

CMA Intermediate · Corporate Accounting and Auditing · Provisions, Contingent Liabilities and Contingent Assets (Ind AS 37)

Paragraph 12 of Ind AS 37 says the term 'contingent liability' is also used for a particular class of liabilities. Which class is this?

Ind AS 37 uses the term 'contingent liability' for liabilities that do not meet the recognition criteria, in addition to liabilities whose existence depends on uncertain future events outside the entity's control. Such items are therefore not recognised as provisions in the balance sheet.

  1. ALiabilities that do not meet the recognition criteriaCorrect
  2. BLiabilities that have been fully paid before the balance sheet date
  3. CLiabilities that arise only in respect of income tax disputes
  4. DLiabilities that are certain in both timing and amount

Explanation

Paragraph 12 adds that 'contingent liability' is used for liabilities that do not meet the recognition criteria. Liabilities certain in timing and amount are not described as contingent, and the Standard does not restrict the term to tax disputes or paid liabilities.

Did you get it right without looking?

One question tells you little. A timed set on Provisions, Contingent Liabilities and Contingent Assets (Ind AS 37) shows your real accuracy, how long you take and where you lose marks.

Practise Provisions, Contingent Liabilities and Contingent Assets (Ind AS 37)Free diagnostic mock

More Provisions, Contingent Liabilities and Contingent Assets (Ind AS 37) questions