To think critically about: The guarantees by the government of Country U that are not shown in the calculations of the spending by the government or in the official deficit. Introduction: The potential liability that occurs based on the result of a future event that is not certain is called contingent liability .

Question

Want to see the full answer?

Answer 1

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 24, Problem 10CRCT

Summary Introduction

To think critically about: The guarantees by the government of Country U that are not shown in the calculations of the spending by the government or in the official deficit.

Introduction:

The potential liability that occurs based on the result of a future event that is not certain is called contingent liability.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Students have asked these similar questions

Why lenders assume no risk in granting loan to the government though the return of this type of loan is minimal?

Why do federally guaranteed loans usually have the least risk for banks, List some popular guaranteed loan programs.

The refinancing rate is the interest rate a central bank like the Bank of England or European Central Bank (ECB) charges on short-term loans to the banking sector. Which of the following statements about the refinancing rate are true? Check all that apply. If the central bank wants to contract the monetary supply, it raises the refinancing rate. A lower refinancing rate discourages banks from borrowing reserves and making loans. O To meet their liquidity requirements, banks agree to repurchase assets put up as collateral for loans from the central bank. The refinancing rate is a primary barometer of central bank policy reported in the media.

Answer 2

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 24, Problem 10CRCT

Summary Introduction

To think critically about: The guarantees by the government of Country U that are not shown in the calculations of the spending by the government or in the official deficit.

Introduction:

The potential liability that occurs based on the result of a future event that is not certain is called contingent liability.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 3

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 24, Problem 10CRCT

Summary Introduction

To think critically about: The guarantees by the government of Country U that are not shown in the calculations of the spending by the government or in the official deficit.

Introduction:

The potential liability that occurs based on the result of a future event that is not certain is called contingent liability.

Expert Solution & Answer

Want to see the full answer?

Check out a sample textbook solution

See solution

Answer 4

Question

Definition Definition Costs that a business is responsible for paying, should a particular event potentially occur in the future. Also called a potential liability, a contingent liability is generally recorded only when the amount of liability can be reasonably estimated and the contingency is likely to occur shortly. The Generally Accepted Accounting Principles (GAAP) and International Financial Reporting Principles (IFRS) make it mandatory for the companies to record any contingent liability taking the principles of full disclosure, materiality, and prudence into consideration.

Chapter 24, Problem 10CRCT

Summary Introduction