Under IFRS, a Loss Contingency Must Be Credited to a Liability

question 78

True/False

Under IFRS, a loss contingency must be credited to a liability account only if the occurrence of the contingent event is probable and if the amount of loss can be reasonably estimated.

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Definitions:

Economies of Scale

Cost advantages that enterprises obtain due to their scale of operation, leading to cost per unit of output decrease with increasing scale.

Average Fixed Costs

The constant expenses in production, which remain unchanged regardless of output levels, when divided by the volume of output created.

U-shaped

A description often used in economics to describe the graphical representation of a situation where certain costs initially decrease, reach a minimum, and then start to increase as output expands.

TVC

Total Variable Cost; the entire cost associated with producing a given output level that varies with the quantity of output.