When Accounting for a Business Combination a Contingent Liability Is

question 5

Multiple Choice

When accounting for a business combination a contingent liability is recognised if:

• A) it is a present obligation that has failed to meet the recognition criteria
• B) its fair value can be measured reliably
• C) it is a possible obligation and it is probable that it will occur
• D) it is probable that an outflow of resources may occur in order to settle the obligation

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Definitions:

Vacuum Extraction Tube

A device typically used during childbirth to assist in the delivery of a baby by applying suction to the baby’s head.

Fetus In Distress

A term denoting a condition in which a fetus does not receive adequate oxygen during pregnancy or labor, which may lead to complications if not promptly addressed.

Oxytocin

A substance that functions as both a hormone and neurotransmitter, playing key roles in the processes of childbirth and milk production, while also contributing to the development of social connections and trust.

Pitocin

A synthetic form of oxytocin used medically to induce labor or strengthen labor contractions during childbirth, and to control bleeding after delivery.