Question

1. Cite (FASB) and explain when a contingent loss should be shown on the financial statements

Answer 1

A contingent liability is a possible obligation depending on the happening or non happening of a future uncertain event or

A present obligation but the payment is not probable or amount cannot be estimated reliably.

Refering to FASB a contingent liability should be recognised in financial statements only when

The liability is probable...( Means the possibility for occurrence of the liability is more than 51%)

and the amount can be estimated reliably otherwise it should be disclosed in footnotes