All subsequent events are recorded in the footnotes as a contingent liability.

Question

Quizplus · Accepted Answer

Not all subsequent events are recorded as contingent liabilities. Subsequent events are evaluated for their financial impact and only those that provide evidence of conditions that existed at the balance sheet date are recorded in the financial statements. Contingent liabilities are potential obligations that may arise depending on the outcome of a future event, and only those that are probable and can be estimated are recorded.

All Subsequent Events Are Recorded in the Footnotes as a Contingent