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A contingent asset is recognized or not? if recognized then under what circumstances?

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Question added by Altaf Bhoon ACA , Assistant Finance Manager , Atlantic Maritime Group FZE
Date Posted: 2014/11/23
RAMAN NAMPOOTHIRI
by RAMAN NAMPOOTHIRI , Dubai, UAE as Audit Manager , Paul & Hassan Chartered Accountants

Under IFRS contingent assets are not recognized

Bilal Naeem
by Bilal Naeem , Assistant Manager Assurance , RSM Bahrain

A contingent asset can never be recognized as it fails the " resource controlled by the entity"  and "prudence" requirements of the framework. However, if the likelihood of  receipt is very high then an appropriate disclosure may be introduced in the financial statements.

 

Hope this helps!!! 

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