Contingent assets should be recognized as soon as they are probable and can be reliably estimated.

Question

Quizplus · Accepted Answer

Contingent assets are not recognized in financial statements because they are uncertain future events that arise from past events and their existence will only be confirmed by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. They are disclosed in the notes to the financial statements when the inflow of economic benefits is probable.

Contingent Assets Should Be Recognized as Soon as They Are