Contingencies/Uncertainties

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  • November 14, 2011 at 4:44 am #162749
    goforCPA
    Member

    We all know that if a contingent liability is PROBABLE and ESTIMABLE then it should be recorded, however if it’s not estimable then it should be disclosed. Would you say that the phrase “reasonably possible” is equivalent to PROBABLE if you came across it in a stimulation?

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  • November 14, 2011 at 11:41 am #307122
    Anonymous
    Inactive

    No, they are not the same.

    Remote = No disclosure/no accrual

    Reasonably possible = disclosure only, no accrual

    Probable = disclosure and accrual (if estimable)

    HTH!

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