The Word "Probable"appears in the Definitions of Assets and Liabilities

question 45

Essay

The word "probable"appears in the definitions of assets and liabilities and in the recognition criteria for liabilities with uncertain amount and/or timing.
a.What is the meaning of probable as used in the definitions of assets and liabilities?
b.How does the meaning of probable as used in the recognition criteria for liabilities with uncertain amount and/or timing differ between U.S.GAAP and IFRS?

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Definitions:

Inventory Shrinkage

The loss of products between point of manufacture or purchase from supplier and point of sale, often due to theft, damage, or errors.

Physical Count

The process of manually counting the actual inventory on hand to verify stock levels and account for discrepancies.

Inventory Records

Documents that track the quantity, value, and movement of products or materials a company holds in stock.

FOB Shipping Point

A shipping term indicating that the buyer assumes all risk and pays for shipping costs from the point of departure; ownership of goods transfers to the buyer when the carrier picks up the items.