CTHRepealedLegislation
AASB 137 - Provisions, Contingent Liabilities and Contingent Assets - July 2004
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AASB 137 - Provisions, Contingent Liabilities and Contingent Assets - July 2004
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Turn the raw legal text into a practical explanation grounded in AASB 137 - Provisions, Contingent Liabilities and Contingent Assets - July 2004.
31 An entity shall not recognise a contingent asset.
32 Contingent assets usually arise from unplanned or other unexpected events that give rise to the possibility of an inflow of economic benefits to the entity. An example is a claim that an entity is pursuing through legal processes, where the outcome is uncertain.
33 Contingent assets are not recognised in financial statements since this may result in the recognition of income that may never be realised. However, when the realisation of income is virtually certain, then the related asset is not a contingent asset and its recognition is appropriate.
34 A contingent asset is disclosed, as required by paragraph 89, where an inflow of economic benefits is probable.
35 Contingent assets are assessed continually to ensure that developments are appropriately reflected in the financial statements. If it has become virtually certain that an inflow of economic benefits will arise, the asset and the related income are recognised in the financial statements of the period in which the change occurs. If an inflow of economic benefits has become probable, an entity discloses the contingent asset (see paragraph 89).