Under ASPE, a Contingent Liability Is Recognized If

question 41

Multiple Choice

Under ASPE, a contingent liability is recognized if

• A) it is certain that funds are available to settle the contingency.
• B) an asset may have been impaired.
• C) the amount of the loss can be reasonably estimated and it is likely that an asset has been impaired or a liability incurred as of the financial statement date.
• D) it is likely that an asset has been impaired or a liability incurred even though the amount of the loss cannot be reasonably estimated.

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Definitions:

Empirical Evidence

Information acquired by observation or experimentation that serves as a basis for knowledge or belief.

Critical Thinking

The objective analysis and evaluation of an issue in order to form a judgment.

Childhood Memories

Recollections of past events that occurred during one's childhood, which can significantly influence one's personality, behaviors, and perceptions in adulthood.

Tolerate Uncertainty

The ability to remain calm and functional despite not knowing the outcome of a situation or having incomplete information.