Under ASPE, a contingent liability is recorded in the accounting records
A)if it is likely that a future event will confirm that a liability has been incurred and the amount of the related loss can be estimated.
B)if the contingency has not already been disclosed in the notes to the financial statements.
C)if the amount can be estimated, but the possibility of occurrence is remote.
D)under no circumstances.

Question

Quizplus · Accepted Answer

Under ASPE (Accounting Standards for Private Enterprises) in Canada, a contingent liability is recorded in the accounting records if it is likely that a future event will confirm that a liability has been incurred and the amount of the related loss can be reasonably estimated. This aligns with the principle of prudence and ensures that financial statements provide a true and fair view of the entity's financial position.

Under ASPE, a Contingent Liability Is Recorded in the Accounting