. Under IFRS, which of the following is used to measure a liability, if a range of estimates is predicted and no amount in the range is more likely than any other amount in the range? a. Minimum of the range b. Maximum of the range c. Mid-point of the range d. Average of the range
Q: A provision should be recognized when: O a. Present obligation from a past event, outflow that will…
A: Provision means an amount set side now to be payable in future because of some past event and…
Q: Any risk involved a situation where there is a possibility of gain refers to: a. Liability risk b.…
A: Introduction: Pure risk: This is a type of risk where there is no gain at all. In pure risk only…
Q: State with reason whether the following statements are true or false Contingent liability is an…
A: Contingent liability can be defined as the liability that may occur on the basis of the outcome of…
Q: Briefly comment on the following questions or statements. a) Describe approaches to minimizing legal…
A: a) Legal liability refers to a situation which is answerable or responsible in law. It covers both…
Q: 4. Which of the following is truè õf a Olt is a potential liability that depends on a future event.…
A: Solution: A contingent liability is a potential liability that may result in outflow of resources in…
Q: PROVIS A provision is an existing liability of uncertain timing uncertain amount. The essence of a…
A: Provision is an amount kept separately for some uncertain event that may happen in the future (Just…
Q: resent obligation is not a contingent liability but shall be recognized as a provision when * a.…
A: Solution: Contingent liability is the liability which depends on the results of any future event…
Q: A contingent liability is an obligation that depends on the occurrence of a future event and that…
A: A contingent liability means a type of liability which probably occur depending on certain future…
Q: What rate is used when computing the present value of the new liability arising from modification of…
A: Present value represents the worth of money is more than in the future for the same amount.
Q: A contingent liability O always exists as a liability but its amount and due date are…
A: Contingent liabilty is a liability which has probable chances of becoming a liability in the near…
Q: Which of the following best describes a contingent liability that is unlikely to occur?A. remoteB.…
A: Contingent liabilities are those liabilities that will occur on the basis of future events. These…
Q: Which of the following statements about contingent liabilities is incorrect? Group of answer choices…
A: A contingent liability is a potential liability that may arise in the future, such as unresolved…
Q: Use the following key (a-d) to identify the proper treatment of each contingent liability a. Record…
A: Introduction : Contingent liability: Contingent liability means it depends on happening or non…
Q: Which is not a management practice for reducing the problems of adverse selection and moral hazard…
A: Since you have asked multiple questions, we will solve the first question for you. If you want any…
Q: When should a contingent liability be recognized and reported on the financial statements? A.…
A: Contingent liability: A liability can occur on future uncertain events.
Q: Which is not an essential characteristic of an insurance contract? A. transfer of significant risk…
A: Answer is A. transfer of significant risk from the issuer to the policyholder Explanation is given…
Q: A contingent liability: O is only remotely possible. O cannot be estimated. O will result from a…
A: Contingent liability is a potential liability that may occur in future because of a past event or…
Q: Which of the following is a type of captive formed to write most types of liability insurance…
A: A captive insurance firm is a special arrangement for insurance, which is a subsidiary insurer to…
Q: In order to have an insurable risk, all of the following must be present except? a. The loss must be…
A: Introduction: Risk can be characterised in terms of the uncertainty of future consequences resulting…
Q: Which of the following statements is true concerning contingent liabilities? a. Such liabilities…
A: A contingent liability is a liability that may occur depending on the outcome of an uncertain future…
Q: anticipated liability, which may or may not arise in future in known as a Current Liability b.…
A: ⇔Debts or obligations that must be paid within a year are referred to as current liabilities,…
Q: An estimated liability is an obligation which is uncertain as to: * A. NO - amount; YES -…
A: Liability means the amount which is to be paid to an outsider by business.Generally liabilities have…
Q: A present liability of an uncertain amount that can be measured reliably using substantial degree of…
A: Liability: It can be defined as the amount owed by the business from the creditors.
Q: Which of the following is the least acceptable measurement for a provision? a. average of a given…
A: Solution: The least acceptable measurement for a provision is "actual settlement amount known after…
Q: Which of the following is a charteristic of a current liability
A: Liability: Liability is the obligation of the company to pay which comes from a past activity done…
Q: Can both moral hazard and adverse selection occur in the insurance market s the difference between…
A: The insurance industry is an important part of the overall financial industry. Insurance is bought…
Q: f the renewal of the policy was at the discretion of the insurer, would you expect the premiums to…
A: Insurance renewal means that the coverage on insurance continues to exist after expiration of the…
Q: How do the passive losses rules and the at risk rules work in conjunction to limit losses?
A: Passive losses: These are the losses that take place when expenses exceed the income in the passive…
Q: An implied condition of pooling risks with insurance is that the event being insured against is…
A: Insurance: An arrangement between the two parties( Insurer & Insured) where the insurer company…
Q: There is substantial modification of terms of an old financial liability if the gain or loss on…
A: As per IAS 39, in extinguishment accounting we will derecognise/extinguish existing liability and…
Q: A provision is an existing liability of uncertain timing and uncertain amount True False
A: Introduction:- Provisions express funds put separately by a company to cover anticipated losses in…
Q: During a period of deflation in which liability account balance remains constant, which of the…
A: Monetary items refers to those assets and liabilities whose value can be measured and expressed in…
Q: Which of the following is NOT a valid type of compensation for breach of contract? Select one: a.…
A: A contract is an agreement between two or more parties in which one party is bound to perform or not…
Q: Which of the following statements is false? Select one: a. A contingent liability should be…
A: A contingent liability is a liability which may occur in the future due to some circumstances not…
Q: List and briefly describe the three categories of likelihood that a future event(s) will confirm the…
A: Loss contingency: Loss contingency is contingency where existing situation or circumstances where…
Q: The _______________ problem is when customers who are most likely to have a claim against an…
A: In a business, an adverse selection occurs where the knowledge distribution between the buyer and…
Q: Which of the following sections of a commercial general liability policy contains information about…
A: Insurance is the process through which an individual or corporation is provided financial coverage…
Q: Contingent liabilities must be recorded if: O The future event is probable and the amount owed can…
A: Contingent liability is the liability that occurs which depends on the future event that may or may…
Q: One of the purposes that deductible are used in insurance policies is to O eliminate coverage for…
A: In insurance, deductibles are expenses that a person has to bear by him/herself before the benefits…
Q: When a contingent liability exists, the likelihood for loss can be evaluated as probable, reasonably…
A: A contingent liability is the possible obligation which will only be confirmed by future event which…
Q: . In determining the amount of a provision, a company using IFRS should generally measure: a.…
A: An economic obligation created and maintained to cover the future liability is termed as provisions.…
Q: n the case of a non-adjusting event, IAS 10 requires it to be: Select one alternative: disclosed…
A: Solution: In the case of a non-adjusting event, IAS 10 requires it to be "disclosed by way of note…
1. Under IFRS, which of the following is used to measure a liability, if a range of estimates is
predicted and no amount in the range is more likely than any other amount in the range?
a. Minimum of the range
b. Maximum of the range
c. Mid-point of the range
d. Average of the range
Trending now
This is a popular solution!
Step by step
Solved in 2 steps
- Which of the following best describes a contingent liability that is likely to occur but cannot be reasonably estimated? A. reasonably possible B. probable and estimable C. probable and inestimable D. remoteWhich of the following best describes a contingent liability that is unlikely to occur? A. remote B. probable and estimable C. reasonably possible D. probable and inestimableWhen is a contingent liability is reported? Select one: when the likelihood of the loss is reasonably possible and a range of outcomes can be estimated when the future events will possibly occur, and the amount of the loss is material when the amount of the loss can be reasonably estimated when the likelihood of the loss is probable and the amount of the loss can be reasonably estimated
- A contingent liability should be recorded in the financial statements when the: Select one: a. Contingent event is probable and the amount can be reasonably estimated. b. Contingent event is probable regardless of whether the amount can be reasonably estimated c. Contingent event is reasonably possible or probable regardless of whether the amount can be reasonably estimated d. Contingent event is reasonably possible and the amount can be reasonably estimatedWhen recognizing a contingent liability, if the future event is probable (likely) and the amount can be reasonably estimated, what are we required to do? A.Group of answer choices B.Do not record or disclose C.Record the liability D. Disclose in notes on financial statementsIf a contingent liability is probable but estimable only within a range, what amount, if any, should the firm report?
- Which of the following statements is false?a. A contingent liability should be disclosed in the notes to the financial statements if thereis a reasonable possibility that a loss (or expense) will occur.b. All contingent liabilities should be reported as liabilities on the financial statements,even those that are unlikely to occur.c. A contingent liability is a potential obligation that depends on the future outcome of pastevents.d. A contingent liability should be accrued if the loss is probable and the amount of theloss can be reasonably estimated.The present obligation is not a contingent liability but shall be recognized as a provision when *a. Amount is reasonably estimable and event occurs infrequentlyb. Amount is reasonably estimable and occurrence of event is probablec. Event is unusual in nature and occurrence of event is probabled. Event is unusual in nature and event occurrs infrequentlyWhich of the following statements is false?Select one:a. A contingent liability should be disclosed in the notes to the financial statements if there is a reasonable possibility that a loss (or expense) will occur.b. A contingent liability should be accrued if the loss is probable and the amount of the loss can be reasonably estimated.c. A contingent liability is a potential obligation that depends on the future outcome of past events.d. All contingent liabilities should be reported as liabilities on the financial statements, even those that are unlikely to occur.
- When should a contingent liability be recognized and reported on the financial statements? A. Reporting contingent liabilities do not require they be probable or reasonably estimated B. When the contingent liability is probable C. When a reasonable estimation can be made of the amount owed D. When the contingent liability is probable and a reasonable estimation can be made of the amount owedThe accrual of a contingent liability and the related loss should be recorded when the a. Loss resulting from a future event may be material in relation to income. b. Future event that gives rise to the liability is unusual in nature and nonrecurring. c. Amount of the loss resulting from the event is reasonably estimated and the occurrence of the loss is probable. d. Event that gives rise to the liability is unusual and its occurrence is probable.State with reason whether the following statements are true or false Contingent liability is an ascertained liability but its amount and due date are indeterminate.