The relevance principle requires that contingent assets be recorded.

Question

Quizplus · Accepted Answer

The relevance principle does not require contingent assets to be recorded; it focuses on providing information that is pertinent and useful for decision-making. Contingent assets are potential assets that arise from past events and whose existence will be confirmed only by the occurrence or non-occurrence of one or more uncertain future events not wholly within the control of the entity. They are typically not recognized in financial statements because their existence is uncertain.

The Relevance Principle Requires That Contingent Assets Be Recorded