Acca financial Accounting (FA) Study Text ac ca (FA)

'a possible asset that arises 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'

 (IAS 37, para 10). 

An example of a contingent asset is when a business claims compensation from 

another party and the outcome of the claim is uncertain at the reporting date. 

Accounting for contingent liabilities and contingent assets  

The requirements of IAS 37 regarding contingent liabilities and contingent 

assets are summarised in the following table: