Liabilities which do not meet the recognition criteria and where the possibility of an outflow of economic resources is remote should: Reading required Learning objective 9.4 on page 256.Group of answer choicesnot be recognised/disclosed in the financial statement at all.be recognised as an accrual.be recognised as a provision.be disclosed as a contingent liability.
Question
Liabilities which do not meet the recognition criteria and where the possibility of an outflow of economic resources is remote should: Reading required Learning objective 9.4 on page 256.Group of answer choicesnot be recognised/disclosed in the financial statement at all.be recognised as an accrual.be recognised as a provision.be disclosed as a contingent liability.
Solution 1
According to AASB 137/IAS 37, liabilities that do not meet the recognition criteria and where the possibility of an outflow of economic resources is remote are not recognised in the financial statements.
However, this does not mean they should not be disclosed at all. The standard requires that if the outflow of economic resources is not remote, then these liabilities should be disclosed as contingent liabilities in the notes to the financial statements.
But in this case, where the possibility of an outflow of economic resources is remote, they should not be disclosed in the financial statements at all.
So, the correct answer is "not be recognised/disclosed in the financial statement at all."
Solution 2
According to AASB 137/IAS 37, liabilities that do not meet the recognition criteria and where the possibility of an outflow of economic resources is remote should not be recognised in the financial statements.
These liabilities are considered contingent liabilities. However, the standard also states that if the possibility of an outflow of resources is remote, then the contingent liability does not need to be disclosed in the notes to the financial statements.
So, the correct answer is "not be recognised/disclosed in the financial statement at all."
Solution 3
According to AASB 137/IAS 37, liabilities that do not meet the recognition criteria and where the possibility of an outflow of economic resources is remote are not recognised in the financial statements.
However, this does not mean they should not be disclosed at all. The standard requires that if the outflow of economic resources is not remote, then these liabilities should be disclosed as contingent liabilities in the notes to the financial statements.
But in this case, where the possibility of an outflow of economic resources is remote, they should not be disclosed in the financial statements at all.
So, the correct answer is "not be recognised/disclosed in the financial statement at all."
Similar Questions
Contingent liabilities are: Reading required Learning objective 9.3.1 on page 254-255Group of answer choicesrecognised in the financial statements unless the possibility of an outflow in the settlement is remote.not recognised in the notes to the financial statements because the possibility of an outflow in the settlement is remote.disclosed in the notes to the financial statements unless the possibility of an outflow in the settlement is remote.disclosed in the notes to the financial statements because the possibility of an outflow in the settlement is remote.
1. Which of the following is not an aspect of the definition of a liability under the revised Conceptual Framework? a. Probable outflow of economic benefits d. Present obligation as a result of past events b. Transfer of an economic resource c. Obligation
Liabilities are classified on the statement of financial position as current or: Group of answer choices non-current. deferred. accrued. unearned.
Contingent liabilities are*1 pointnot recognised in the notes to the financial statements because the possibility of an outflow in settlement is remote.recognised in the notes to the financial statements because the possibility of an outflow in settlement is remote.recognised in the notes to the financial statements unless the possibility of an outflow in settlement is remote.recognised in the financial statements unless the possibility of an outflow in settlement is remote.
Contingent liabilities should be recorded in the accounts if there is a remote possibility that the contingency will actually occurGroup of answer choicesTrueFalse
Upgrade your grade with Knowee
Get personalized homework help. Review tough concepts in more detail, or go deeper into your topic by exploring other relevant questions.