Contingent liabilities and contingent assets
You'll learn how to identify and account for contingent liabilities and contingent assets under IAS 37, and understand when to recognise, disclose, or ignore them in financial statements.
This lesson is part of a paid course
Buy the course to unlock every video lesson and the AI Tutor, plus mock exams with feedback on CIMA courses.
Already bought? Sign in
Ask the AI tutor anything about this lesson
It knows every lesson in the course — explanations, clarifications, practice questions.
In this lesson
- 0:00 Contingent liabilities and assets overview
- 1:37 Contingent liability definition and disclosure
- 2:35 Contingent assets explained
- 4:12 Recognition and disclosure decision table
- 5:33 Wrongful dismissal claim worked example
- 6:47 Defamation compensation claim example
About this lesson
This video covers the key distinction between provisions (probable outcomes) and contingencies (possible outcomes), and explains the three-question framework that determines whether cash outflows or inflows should appear in the accounts or only in disclosure notes. You'll see how the principle of prudence means we're more likely to recognise potential losses than potential gains, and work through practical examples to apply these rules confidently in your exam.
Duration: 8m
Transcript
Every lesson comes with a full searchable transcript - included with the course.
Get the Financial Reporting course
All 66 video lessons, an AI Tutor in every lesson and lifetime access.
Already bought? Sign in