The answer is:

be disclosed as a contingent liability.

Here's the step by step explanation:

1. Liabilities that do not meet the recognition criteria are those that do not satisfy the definition of a liability as per the accounting standards. This means that there is uncertainty about the timing or amount of the future outflow of economic resources.

2. If the possibility of an outflow of economic resources is remote, it means that it is unlikely that the company will have to transfer any resources to settle the liability.

3. Such liabilities are not recognised as accruals or provisions. Accruals are liabilities to pay for goods or services that have been received or supplied but have not been paid, invoiced or formally agreed with the supplier, including amounts due to employees (for example, amounts relating to accrued vacation pay). Provisions are liabilities of uncertain timing or amount.

4. Instead, these liabilities are disclosed as contingent liabilities. A contingent liability is a potential liability that may occur, depending on the outcome of an uncertain future event. It is recorded in the books of accounts only if the contingency is probable and the amount of the liability can be reliably estimated. If the contingency is remote, it is disclosed in the financial statements but not recognised as a liability.

Question

The answer is:

be disclosed as a contingent liability.

Here's the step by step explanation:

1. Liabilities that do not meet the recognition criteria are those that do not satisfy the definition of a liability as per the accounting standards. This means that there is uncertainty about the timing or amount of the future outflow of economic resources.

2. If the possibility of an outflow of economic resources is remote, it means that it is unlikely that the company will have to transfer any resources to settle the liability.

3. Such liabilities are not recognised as accruals or provisions. Accruals are liabilities to pay for goods or services that have been received or supplied but have not been paid, invoiced or formally agreed with the supplier, including amounts due to employees (for example, amounts relating to accrued vacation pay). Provisions are liabilities of uncertain timing or amount.

4. Instead, these liabilities are disclosed as contingent liabilities. A contingent liability is a potential liability that may occur, depending on the outcome of an uncertain future event. It is recorded in the books of accounts only if the contingency is probable and the amount of the liability can be reliably estimated. If the contingency is remote, it is disclosed in the financial statements but not recognised as a liability.

Knowee AI · Accepted Answer

The answer is:

be disclosed as a contingent liability.

Here's the step by step explanation:

1. Liabilities that do not meet the recognition criteria are those that do not satisfy the definition of a liability as per the accounting standards. This means that there is uncertainty about the timing or amount of the future outflow of economic resources.

2. If the possibility of an outflow of economic resources is remote, it means that it is unlikely that the company will have to transfer any resources to settle the liability.

3. Such liabilities are not recognised as accruals or provisions. Accruals are liabilities to pay for goods or services that have been received or supplied but have not been paid, invoiced or formally agreed with the supplier, including amounts due to employees (for example, amounts relating to accrued vacation pay). Provisions are liabilities of uncertain timing or amount.

4. Instead, these liabilities are disclosed as contingent liabilities. A contingent liability is a potential liability that may occur, depending on the outcome of an uncertain future event. It is recorded in the books of accounts only if the contingency is probable and the amount of the liability can be reliably estimated. If the contingency is remote, it is disclosed in the financial statements but not recognised as a liability.

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