7) Explain the difference between "probable," "possible," and "remote" under IFRS.
8) Which statement about contingencies is correct?
A) If the future outcome is remote but reliably measurable, a provision is recorded.
B) If the future outcome is remote, but not reliably measurable, disclosure is required.
C) If the future outcome is remote, but not reliably measurable, no action is required.
D) If the future outcome is remote, but reliably measurable, disclosure is required.
9) Which statement about contingencies is correct?
A) If the future outcome is possible and reliably measurable, a provision is recorded.
B) If the future outcome is possible, but reliably measurable, no action is required.
C) If the future outcome is possible, but not reliably measurable, no action is required.
D) If the future outcome is possible, but reliably measurable, disclosure is required.
10) Which statement about contingencies is correct?
A) If the future outcome is probable and reliably measurable, a provision is recorded.
B) If the future outcome is probable, disclosure is required if it is reliably measurable.
C) If the future outcome is probable, but not reliably measurable, no action is required.
D) If the future outcome is probable, a provision is required, even if it is not reliably measurable,
11) Which statement is correct about provisions, contingent assets and contingent liabilities?
A) Provisions are recorded in the financial statements whereas contingent assets are not recorded.
B) Provisions are recorded in the financial statements whereas contingent liabilities are not recorded.
C) Probable contingent liabilities are recorded at management's best estimates.
D) Probable contingent assets are recorded at management's best estimates.
12) Which statement is correct about provisions, contingent assets and contingent liabilities?
A) The same probability threshold is used to record contingent liabilities and provisions.
B) The same probability threshold is used to record contingent assets and contingent liabilities.
C) Possible contingent liabilities are recorded.
D) Virtually certain contingent assets are recorded.