When accounting for a business combination a contingent liability is recognised if:
A) it is a present obligation that has failed to meet the recognition criteria
B) its fair value can be measured reliably
C) it is a possible obligation and it is probable that it will occur
D) it is probable that an outflow of resources may occur in order to settle the obligation

Question

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In accounting for a business combination, a contingent liability is recognized if its fair value can be measured reliably. This allows for the fair representation of the acquiring company's financial position post-acquisition.

When Accounting for a Business Combination a Contingent Liability Is