Onopea Inc. considered two contingencies at the end of 2016: ** a probable loss in the range of $200,000 to $900,000
** a reasonably possible loss of $150,000
Under IFRS, what is the balance for contingent liabilities at the end of 2016?
A) $200,000
B) $550,000
C) $350,000
D) $1,050,000

Question

Quizplus · Accepted Answer

Under IFRS, only probable losses are recognized as contingent liabilities. The probable loss is estimated at $200,000 to $900,000, so the balance for contingent liabilities at the end of 2016 is $550,000 (the midpoint of the range).