Contingent losses should only be accrued if it is likely that a loss will arise due to events that existed at the date of the financial statements and the loss can be reasonably estimated.

Question

Quizplus · Accepted Answer

Contingent losses should only be accrued if there is a high likelihood that the loss will occur and the amount of the loss can be reasonably estimated. If both conditions are not met, no accrual should be made.

Contingent Losses Should Only Be Accrued If It Is Likely