Under ASPE, a contingent liability is recognized if
A) it is certain that funds are available to settle the contingency.
B) an asset may have been impaired.
C) the amount of the loss can be reasonably estimated and it is likely that an asset has been impaired or a liability incurred as of the financial statement date.
D) it is likely that an asset has been impaired or a liability incurred even though the amount of the loss cannot be reasonably estimated.

Question

Quizplus · Accepted Answer

ASPE requires that a contingent liability be recognized if the following two criteria are met: (a) the amount of the loss can be reasonably estimated and (b) it is likely that an asset has been impaired or a liability incurred as of the financial statement date. The availability of funds to settle the contingency is not relevant. If the likelihood of an asset impairment or liability being incurred is only possible or remote or the amount of the loss cannot be reasonably estimated, then disclosure is required but no recognition is made in the financial statements.

Under ASPE, a Contingent Liability Is Recognized If