Under IAS 37, How Are Contingent Liabilities Treated in the Financial

question 42

Multiple Choice

Under IAS 37, how are contingent liabilities treated in the financial statements?

• A) IAS 37 does not address contingent liabilities.
• B) They are recorded as current liabilities if the amount is reasonably measured.
• C) They are disclosed in the notes to the financial statements when there is more than a remote possibility of an outflow of resources.
• D) They are not disclosed.

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Definitions:

Binomial Experiment

A statistical experiment that fits the binomial distribution; characterized by having a fixed number of trials, distinct outcomes (success or failure), independence, and constant probability of success.

Variance

A measure of the dispersion or spread of a set of values, indicating how much they differ from the average of the set.

Sample Size

The number of observations or data points collected in a sample from a population for analysis.

Continuous Random

Pertains to a random variable that can take an infinite number of possible values in a continuous range.